Disability Insurance Awareness Month in May presents a good opportunity to highlight the increasingly important role employee benefits play in financial stability, Simonds said.
Unum’s survey of the two largest generations in the workforce reveals that, among generation Y workers (ages 18-30) who do not have disability coverage:
- 39 percent say relying on savings would be one of their two likeliest options if they could not work
- 33 percent say borrowing from friends or family would be a likely source of income, and 16 percent would borrow from credit cards
- 18 percent aren’t sure how they would get by
Among employed baby boomers (ages 44-62) who do not have disability coverage:
- 49 percent say relying on savings would be one of their two likeliest options if they could not work
- 40 percent say a partner’s earnings would be a likely source of income
- 15 percent aren’t sure how they would get by
"As financial safety nets fray and savings erode, these generations have a particular need to think about ways to protect their financial stability," Simonds said. "Boomers are facing the loss of savings and 401(k) values, while the newest generation of workers is trying to build a financial foundation in an unsteady time."
The survey also reveals neither group considers disability benefits a top financial priority. Among generation Y workers, only 1 percent rank disability coverage as one of their top four financial priorities. And the news isn’t much better among boomers, only 5 percent of whom identified disability insurance as among their top four financial priorities.
For 63 percent of generation Y workers, paying down debt/student loans is a top financial priority, while putting money into savings or retirement accounts is a top priority for 66 percent of employed boomers. Dining out/entertainment is a high priority for 57 percent of generation Y workers, while paying for vacations is a high priority for 32 percent of boomers.
The survey also reveals that the workplace is a critical source of information about benefits protection. For 76 percent of employed baby boomers and 68 percent of generation Y workers, the workplace is among their most reliable sources of information about benefits.
"Effective education at work is the best way to help American workers understand the value of benefits," Simonds said. "Industry data shows more than 70 percent of Americans live paycheck-to-paycheck, and half of bankruptcies are caused by unexpected illnesses, injuries and medical bills. The right benefits coverage can make all the difference."
