Reports highlight need for disability coverage, better education through workplace
Unum contributes to research from Department of Labor and President's Advisory Council for Financial Capability
CHATTANOOGA, Tenn.--(BUSINESS WIRE)-- Disability insurance is crucial to the financial security of working Americans, yet too few employees understand the risks and are covered by this important benefit, says a new report by the Advisory Council on Employee Welfare and Pension Benefit Plans.
Submitted to the secretary of Labor, the report recommends a comprehensive education campaign for employers and their employees on the risks of becoming disabled from illness or injury during a working career and the significant financial impact this can have.
This report echoes recommendations from the President's Advisory Council on Financial Capability's final report issued in March, which noted that the workplace is a critical resource in providing financial education and essential benefits that protect millions of working people.
Unum (NYS: UNM) is proud to have contributed to both reports and looks forward to future partnerships that highlight the need for accessible and affordable benefits that help protect individuals and families.
"Similar conclusions reached by these two separate reports underscore the important role that businesses can play in helping their workforce prepare for the financial consequences of illness and injury," said Scott Maker, Unum senior vice president of government affairs. "The need for strong financial education and essential benefits has never been greater, as many workers today are living paycheck to paycheck and lack adequate financial resources and protection should they become unable to work due to health problems."
In testimony to the Department of Labor's (DOL) Advisory Council, Unum Senior Vice President for Underwriting Steve Mitchell outlined the increased frequency of disability and lack of preparedness by U.S. workers.
According to the Social Security Administration, 1 in 4 of today's 20-year-old individuals will become disabled before reaching age 67, Mitchell offered in prepared materials. Similarly, the Council for Disability Awareness indicated that 1 in 7 workers can expect to be disabled for five years or longer; and, 50 percent of those disabled employees that are out of the workforce for three months or more are likely to remain out for at least two years.
Despite these significant risks, less than one-third (31 percent) of employees today are covered by long term disability benefits at work. Mitchell noted that the most effective and affordable way to protect workers financially in the event of disability is through group disability insurance. A disability benefit replaces up to 66 percent of an employee's income if they become ill or injured and can no longer work.
Labor's Advisory Council recommends education and outreach by the department to illuminate the need for this coverage and to help businesses understand their options in providing this benefit to employees.
Education was the theme of the recommendations from the President's Advisory Council for Financial Capability (PACFC) as well. Its report concluded that delivering financial education and access in the workplace - and providing employers with cost-effective models of high-quality financial guidance and related benefits - has the potential to positively impact 134 million Americans.
"We all have to make extremely important decisions during our working years about insurance benefits, savings and retirement," Maker said. "It is so important for workers to have a clear understanding of their needs, the risks and the solutions to consider for these critical issues."
Over the course of the PACFC's three-year study, more than 75 companies, trade and professional associations, and nonprofit organizations provided valuable perspective about how best to set achievable goals and produce results. Unum's contributions to this work drew on the company's expertise as a leading provider of financial protection benefits, and of education and enrollment programs that help employees connect the dots between financial risk and essential coverage. In the final report, Unum's President and CEO Tom Watjen was among those thanked for their contributions to this work.
To share best practices in employee education and benefits, the President's Advisory Council created "Financial Capability at Work: A Strategic Framework to Guide Employers," a resource for employers to help them provide quality financial capability opportunities in the workplace.
This guide includes a link to research commissioned by Unum in partnership with Harvard Business Review Analytic Services that underscores the value of workplace benefits and education: Nearly 80 percent of HR leaders agree — being a company that cares about the well-being of employees is very important to attracting and retaining a quality workforce.
"Improving the financial capability of the American workforce has never been more important," Maker said. "Nearly 70 percent of workers today lack basic protection for their most valuable asset, their income. We hope the recommendations of the PACFC helps workers evaluate their financial situation and make choices that protect the resources they work so hard to earn."
ABOUT UNUM GROUP
Unum Group (www.unum.com) is a leading provider of financial protection benefits in the United States and the United Kingdom. Unum's portfolio includes disability, life, accident and critical illness coverage, which help protect millions of working people and their families in the event of an illness or injury. The company reported revenues of $10.5 billion in 2012, and its subsidiaries - Unum US, Colonial Life and Unum UK - provided $6.3 billion in benefits last year.
MC Guenther, 423-294-6108
Toll free: 866-750-8686
KEYWORDS: United States North America Tennessee
The article Reports highlight need for disability coverage, better education through workplace originally appeared on Fool.com.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.