Home > Employee Benefits > Long term disability claims increase in today’s economic environment

Long term disability claims increase in today’s economic environment

The Council for Disability Awareness recently released its annual Long-Term Disability Claims Review from the U.S. working population. The report summarizes quantitative and qualitative long-term disability insurance claims data from 2007-2011, collected from CDA members. This year’s study includes data from 17 CDA member companies and represents over 75 percent of the commercial disability insurance marketplace. The results highlight emerging trends which allows for evaluation of the impact of these claims.

The report also includes selected worker disability data from the Social Security Disability Insurance (SSDI) program. 

The following are a few key findings from the 2012 CDA Survey: 

  • 9.3 billion in long-term disability insurance claim payments were made in 2011 by CDA member companies that participated in the study, representing a 2 percent increase over payments made in 2010.
  • Impact of the economic downturn on disability claims: Forty-three percent of participating companies reported increased claim incidence from 2010 to 2011, with 38 percent reporting incidence as flat from 2010, and 19 percent reporting lowered incidence. In 2010, 56 percent of participating companies reported increased claim incidence. Most companies continue to believe the economic environment is a factor.
  • Impact of the economic downturn on employers providing group long-term disability programs: Participating companies reported a very slight increase in the number of employers offering group long-term disability insurance programs in 2011 compared to the prior year. 2011 was the first year since 2008 when the number of employers with long-term disability insurance plans increased over the year prior.

Click here to view the full report.

In addition, the following statistics offer a closer look into the disabled American workforce and associated risk factors:

  • Just over 1 in 4 of today’s 20 year-olds will become disabled before they retire.
  • Over 36 million Americans are classified as disabled; about 12% of the total population. More than 50% of those disabled Americans are in their working years, from 18-64.
  • 8.3 million disabled wage earners, over 5% of U.S. workers, were receiving Social Security Disability (SSDI) benefits at the conclusion of March, 2011.
  • In December of 2010, there were over 2.5 million disabled workers in their 20s, 30s, and 40s receiving SSDI benefits.

The following statistics relate to risk factors relating to disabilities and come from the CDA’s Personal Disability Quotient risk calculator:

  • A typical female, age 35, 5’4″, 125 pounds, non-smoker, who works mostly an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:
    • A 24% chance of becoming disabled for 3 months or longer during her working career
      • with a 38% chance that the disability would last 5 years or longer
      • and with the average disability for someone like her lasting 82 months
    • If this same person used tobacco and weighed 160 pounds, the risk would increase to a 41% chance of becoming disabled for 3 months or longer.
  • A typical male, age 35, 5’10″, 170 pounds, non-smoker, who works an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:
    • A 21% chance of becoming disabled for 3 months or longer during his working career
      • with a 38% chance that the disability would last 5 years or longer
      • and with the average disability for someone like him lasting 82 months
    • If this same person used tobacco and weighed 210 pounds, the risk would increase to a 45% chance of becoming disabled for 3 months or longer.

About the Author

 Christine Vogan is a Key & Individual Insurance Representative at William Gallagher Associates in Employee Benefits Practice with a core focus on WGA’s Private Client Group. Her responsibilities consist of working with both individual clients and executives at corporate companies and assisting them with the Life, Disability and Long Term Care insurance planning.

617.646.0366 | CVogan@wgains.com | Connect with Christine on LinkedIn

  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s