Common Reasons Employees Don’t Elect Disability Insurance

This article originally appeared on the Ameican Fidelity Blog

You may understand the importance of Disability Income Insurance but may be asking: Why aren’t more employees taking advantage of it? There are myriad reasons why employees aren’t electing the coverage.

Lack of Understanding

Many employees don’t understand what disability insurance covers, how it works, or why it’s needed.

Some questions to ask employees are: Do you rely on your salary? Is your salary important to you? This helps them understand why they need income protection coverage with disability insurance.”

Sick Days

A common reason some longer-tenured employees won’t elect disability insurance is because they have built up weeks—possibly even months—of sick days.

Here is a story about why depending upon sick days isn’t enough:

“I had been with my company for almost 24 years and had only taken two days. My husband had a stroke and was in the hospital, so I took off for three months to care for him.

This leave exhausted all the sick days I had built up. The disability insurance didn’t pay for that time, of course, but now, if I were to experience a disabling injury or illness, I would need disability insurance. “

After hearing this story, what if something happened to one of your loved ones? Think about how quickly things can change, and that’s it not just about you, but your family.”

Generational Challenges

Younger generations often won’t elect disability insurance because they don’t feel at risk for illness or injury, or they don’t have a family to support yet.

Younger, single people are often the least inclined to purchase. They say, if something happens to me, I don’t have kids to worry about,

But the younger generations are the people who need disability insurance because they are more active outside of work, such as playing sports. So, they are more at risk for a disabling injury.

And for older, more financially-established employees, high incomes can actually be a deterrent. Sometimes, employees who make the most money are hesitant to elect disability insurance, but they also need income protection coverage, too.

Many times, families with high-income-earners are single-income families. If the employee was to be out of work, the family might not have any flow of income at all. They have built a lifestyle around this income, so if it were to disappear, they may have to make some major life changes.

It Won’t Happen to Me

If employees are generally healthy, they usually don’t fear the possibility of a disabling injury or illness.

Nobody plans on being disabled, but things happen that are unexpected. We get into a car every day. That alone puts you at risk.

I’ll Never Use It

Often, employees worry about the costs of the insurance, especially if they may never use it.

So many employees ask, “What if I never use this?”. We hope they never have to. Think of it like this: You have homeowner’s insurance, and you may never use it. But if your house were to catch fire, flood, or get robbed—you would be really thankful you have it. Disability insurance is the same way.

Ensure Your Employees are Educated

Because there are many misconceptions about disability insurance, it’s important to help employees learn about the policy and obtain financial protection.