Reports highlight need for disability coverage, better education through
Unum contributes to research from Department of Labor and President’s Advisory
Council for Financial Capability
CHATTANOOGA, Tenn. -- April 18, 2013
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 (NYSE: 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
“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.
For more information visit us at www.unum.com or connect with us at
www.facebook.com/unumbenefits, www.twitter.com/unumnews and
MC Guenther, 423-294-6108
Toll free: 866-750-8686
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