Are you covered?

When people think about disability insurance (DI) coverage, most think of the worst case scenario, such as a life threatening illness or a situation that creates a major life changing event.  While that is sometimes the case, most DI situations neither relate to terminal health conditions nor end in a permanently disabled condition.

Following are the top 5 reasons for a DI claim for both short-term (13-26 weeks) and long-term disability claims.*

Short Term:

• Maternity (18.9%)
• Non-back injuries (10%)
• Complications from pregnancy (8.4%)
• Digestive disorders (8.8%)
• Back disorders (7.1%)

 

Long Term:

• Cancer (16%)
• Back problems (15.1%)
• Injuries (9.8%)
• Behavioral health (9.8%)
• Circulatory disorders (9%)

*Source: UNUM 2012 Claims Data

DI coverage could be the most efficient use of your resources as you review your total risk mitigation strategy and budget.   As you can see from the data, most DI claims are for issues that do not permanently inhibit one’s ability to work productively, once the condition is treated properly.  Additionally, having a DI policy in place can be a protective mechanism for your policies and procedures as it relates to how you handle a situation that involves time off.

For instance, assume that you did not have a DI policy in place and you have a 20 year employee who becomes seriously disabled.  Because of the relationship and years of service, you might consider compensating the person, despite the fact that the person is unable to work for an extended period of time.  Shortly after the first situation, a one year employee experiences a serious health situation that requires an absence from work for an extended period of time.  What do you do now?  Can you afford to pay both people?  Better asked, how can you afford not to, after considering the potential for a discrimination law suit if you don’t? 

Disability coverage provides multiple benefits to mitigate the risks described above.  First, it provides compensation for your employee while he/she is unable to work.  Second, assuming that you’re with the appropriate carrier, the DI policy will typically assist in getting your employee back to work more efficiently.  Third, having DI coverage actually provides a legitimate human resource policy for how you handle situations when someone becomes unable to work as a result of illness and/or injury.  This not only provides a clear path for those who need to understand what happens, but also keeps you out of court if a discrimination case enters your life as a result of handling situations inconsistently.  Finally, DI is one of the least expensive risk mitigation products available.  It’s pennies on the dollar as compared to all other forms of health coverage.  As you review your risk portfolio, make sure that disability coverage is part of the plan.  It could be one of the best strategic moves you’ve ever made.