Employees at small businesses are less likely to have disability insurance than those who work for larger employers, a Guardian Life study showed.
Guardian’s most recent workplace benefits study showed 76% of those who work for a company of 1,000 or more employees have DI, versus 41% of those who work for an employer with 50 workers or less.
The vast majority (92%) of Americans who have DI acquired it through their employer, Guardian said. And fewer Americans own DI, with an 11% drop in the percentage of those who have the product – from 65% in 2017 to 54% in 2018.
Not having DI as a workplace benefit “is clearly contributing to lower financial wellness among working adults in America, given that 40% of the working population in the U.S. works for small companies,” said Gene Lanzoni, assistant vice president, thought leadership, Guardian Life.
Workers may not realize that DI is actually income replacement, Lanzoni said. “People don’t understand what it is.”
But offering DI as a benefit to small-business employees does more than help the workers, Lanzoni said. It also provides a benefit to the business, particularly in the current low unemployment environment.
“For those small businesses looking to attract and retain employees, they are competing on benefits,” he said. “Income replacement is important to employees. They just don’t realize DI does that.”
Lanzoni said DI carriers and benefits brokers need to do more to educate small-business owners about the product, what it means to employees, and how offering DI could be a differentiator in attracting talent.
DI also can help protect workers against a major source of stress – financial stress.
“Money is a leading source of stress for many working families,” Lanzoni said. “Brokers can emphasize the role that DI can play in protecting income and improving financial wellness. And then talk about the role DI can play in helping the employer. Productivity is important for small business. And DI can be important in attracting and retaining workers.”
In thinking about the role DI can play in protecting working Americans, a broker “can certainly change the conversation in an effective way by focusing on how DI can protect income,” Lanzoni said.
“People don’t realize the chances of their going out on a disability leave are greater than what they think.”
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.