By Scott B. Elkind, Esq.
Unum sponsored a an extensive study into the value of long term disability benefits entitled “Financial Security for Working Americans: An Economic Analysis of Insurance Products in Workplace Benefits Programs” undertaken by Charles River Associates of Boston, Massachusetts and dated July, 2011.
The introduction by Unum cited several pertinent facts including:
- Most Americans do not have the financial resources to pay their bills if they become unable to work with 70% of households unable to pay normal living expenses if a wage earner is disabled for six months
- Most workers underestimate the likelihood of disability and do not take steps to protect themselves financially from this risk
- 2/3 of American workers do not have access to low cost disability insurance from their employers
- Few workers could maintain an acceptable lifestyle on government disability benefits alone
- Wage earners with disability coverage are much less likely to fall into poverty and require public assistance
- Insurers have demonstrated success in helping workers return to work more quickly from disability allowing greater taxable revenues to the government
- Replacement income from employer sponsored disability programs replace a substantial portion of a worker's salary which contributes to consumer spending and government revenues
The Report itself goes on to state many other important facts including:
- Anyone, at any time, can be affected by a disabling injury or debilitating illness. Disability during working years means an individual suffers not only the malady but risks losing the ability earn a living. Which means enormous stress to the individual and his family
- Employer-sponsored disability provides a crucial safety net for employees, families, taxpayers, and society
- For an employee who earns $50K/year, the value of a disability income can cost the insurer $500K with a younger employee costing the insurer $1M or more. Such a policy will cost a typical employee only $300/year in premiums
- 1 in 3 workers will become disabled for at least six months during the course of their working years with a median length of disability of 2.5 years
- 90% of disability are not caused by work-related injuries or conditions and are therefore not covered by workers compensation programs
- 70% of Americans are denied Social Security Disability benefits upon their initial application
- US workers pay annual premiums of $21B for disability policies annually which have a face value of $7.25T
- 60% of employees state that the employee benefits offered by the employer were an important reason for remaining at that place of work
- Employers have little knowledge or ability to address the myriad issues associated with a disability
- The disability insure will have experience with may disabilities and potentially disabling situations. The disability insurer use its knowledge to assist the employer and it employees to reduce the incidence and duration of the disability
Now, that Unum has gone to all this time and expense to tell you the advantages of acquiring disability insurance coverage (preferably from them), you should know how they treat your claim once they are insuring you:
- Unum has a large staff of in-house doctors, several of whom have testified that they are paid bonuses based on company expectations in terms of claims review
- Unum physicians also receive stock and stock options based on their performance. The performance of the stock is directly related to their ability to deny claims and increase income to company.
- Unum ignores what your physicians say about your condition and only rely on the opinions of its in-house physicians who instruct the vocational persons as to what activities that you are capable of performing
- The in-house Unum doctors often have very limited personal medical practices (or are retired) and do not examine you personally
- The vocational personnel will attempt to find work by any means including mischaracterizing your previous work activities
- Unum management once sponsored the “Hungry Vulture Award” for personnel who were able to terminate large numbers of claims
- Unum personnel have been instructed to go through their files for the purpose of finding claims which can be terminated
- Unum does not tell you in advance that the will subtract any amount you receive from your SSD for yourself and your children from your monthly disability benefit (in most group and many private policies)
- The list can go on even longer.........
So, as you can see, Unum says one thing when it wants to sell you a disability policy, but will do another when it comes to the time when you need it to pay your disability claim.