How Disability Insurance Can Help Protect Financial Wellness and Holistic Health

By Daniel Iskra, of MetLife

Given recent market volatility and economic uncertainties, it’s no surprise that many American workers are struggling financially and experiencing a decline in their financial wellness and mental health.¹ In fact, only 55% of employees feel financially healthy and 65% of employees feel mentally well – down 9% and 3%, respectively from 2022.¹

Declines in financial and mental wellness can be exacerbated when the unexpected happens. Indeed, only 43% of American adults would be able to pay an emergency expense from their savings.²This contributes to holistic health strains; however, benefits like disability insurance can help during unpredictable circumstances because these benefits protect and replace a portion of one’s income due to an illness or accident.³ Moreover, for individuals already struggling with their financial wellness, knowing that benefits like disability insurance are in place if they are suddenly unable to earn a paycheck can help provide peace of mind.

Interestingly, employers are significantly overestimating employee well-being, with 83% of employers say their employees are financially healthy – highlighting a perception gap on the state of employees’ financial well-being.¹ With facts like these in mind, here are a few important considerations regarding employee financial wellness and how benefits such as disability insurance can help.

Financial Indicators Are Trending in The Wrong Direction

Economic slowdown and inflation are undoubtedly impacting workers’ lives, and in turn, employee financial indicators are trending in the wrong direction. As one example, 55% of workers say they are living paycheck to paycheck, an increase from 43% in 2022.¹ On the contrary, employees who own disability insurance are more likely to say they are on track to achieve their financial goals (52% vs. 46%) and less likely to live paycheck to paycheck (51% vs. 56%).¹

This example highlights how disability insurance can help individuals feel more secure in their financial well-being and prepared for the road ahead. Moreover, 62% of employees say they are looking to their employer for more help in achieving financial security through employee benefits, such as disability, life insurance, and financial wellness programs.¹ By offering benefits like these, employers can help combat the causes of poor financial wellness and support employees in alleviating feelings of financial strain.

Disability Insurance Is a Win-Win for Employers and Employees

The risk of a disability during working years is higher than one might think, which could be why employers and employees sometimes overlook this valuable benefit. A staggering 25% – or one of every four employees – will experience a disability that keeps them out of work for at least a year before they reach retirement age.⁴ Disability insurance can help reduce the risk of financial setbacks and protect against long-term financial risks during unpredictable times.

For employers, it’s worth noting that employees who own disability insurance through their employer are significantly less likely to leave their employer (21% vs. 29%), and these employees report having higher job satisfaction (72% vs. 68%).¹Furthermore, there is a strong correlation between employees’ holistic health (including financial wellness) and their perceptions of being cared for by their employer. In fact, workers who feel financially healthy are 87% more likely to feel cared for most of the time they are working.¹ Disability insurance is a win-win benefit for employers looking to demonstrate care and for employers who are aiming to boost their financial wellness.

Final Thoughts

While many individuals protect their valuables such as their vehicles and homes through insurance, they often overlook disability insurance as a tool to protect future security and overall well-being.⁵Disability insurance is a crucial benefit to protect employees’ financial wellness and boost mental health, particularly during uncertain economic times. Not only are individuals who have disability insurance 16% more likely to be financially healthy, but they are also 9% more likely to be mentally healthy – demonstrating how benefits can increase holistic health.¹ As individuals continue to face tangible hardships during this turbulent period, disability insurance can support financial wellness both now and in the future.