Contact: Lauren Carmody
Phone: 860.676.2300 x149
Claims from Baby Boomers and Women Contribute to Long Term Disability Claim Increase
PORTLAND, Maine – The Council for Disability Awareness (CDA) today announced that the number of long term disability claims continued to increase year over year, while the number of wage earners protected by private disability income insurance declined in 2011 for the third consecutive year, according to the 2012 Long Term Disability Claims Review.
Of the 155,000 new disability claimants approved by CDA member companies during 2011, more than half (57 percent) were women, a percentage that has slowly increased compared to the percentage of claims from men.
“We continue to see an overall increase in long term disability claims filed over time,” said Barry Lundquist, president of the CDA. “The aging workforce and a painfully-slow jobs recovery are clearly having an impact. Also, the jobs environment continues to be an obstacle to returning recovering workers to productive employment.”
The age group that experienced the largest increase in the number of new approved claims over the past four years was individuals over age 60, in part, reflecting the aging of the baby boomer generation. New claims for those under age 40, and for individuals in their 50’s remained steady, while claims for individuals between ages 40 and 50 have declined over the past four years.
In total, CDA member companies paid more than $9.3 billion in long term disability insurance claims in 2011, which is a 2 percent increase from 2010. Claim payments were made to 662,000 individuals who were prevented from working and earning a paycheck by illness or injury.
“When you look at the Social Security Disability Insurance program, the number of workers receiving payments increased to 8.6 million by the end of 2011, its highest level ever,” Lundquist continued. “Given the current trends, analysts predict that the SSDI trust fund will be depleted within five years. However, the silver lining is that applications and new SSDI claim approvals declined during 2011 after several years of increased applications and approvals.”
Additional key findings from the 2012 Long Term Claims Review included:
- Insured lives covered by private employer paid and employer sponsored group long term disability programs declined by 0.5 percent, reflecting the third straight year this number has dropped. Contributing factors include the poor economic and jobs climate as well as a gradual transfer of benefit costs from employers to employees.
- By a large margin, diseases of the musculoskeletal system and connective tissue – such as arthritis, spine disorders, back pain, sciatica and osteoporosis – continue to be the leading cause of disability claims (representing 30.5 percent of all 2011 claims).
- New disability claims resulting from complications of pregnancy and childbirth increased in 2011 and now account for more than 9 percent of new long term disability claims for female wage earners.
- The average Social Security Disability Insurance (SSDI) monthly benefit in 2011 was $1,111. For the nearly one million disabled employees under the age of 40, the average benefit was $816.
- Over the past ten years, the number of wage earners covered by SSDI increased by 8 percent. During the same time period, the number of workers receiving SSDI claim payments increased by 63 percent.
“It is a serious concern that even as long term disability claims rise, fewer of America’s wage earners have protected their incomes from the serious loss that could result if an illness or injury prevented them from working,” said Lundquist. “Our research continues to demonstrate that workers dramatically underestimate their risk of disability, and too often don’t think about protecting their most valuable financial resource – their income.”
To obtain a copy of the 2012 Long Term Disability Claims Review, please visit disabilitycanhappen.org. Additional resources are also available through CDA’s website, including disability research, statistics, tools and financial planning guides that provide tips on how to assess the risk of disability and protect against its impact. Individuals can determine their own personal risk of becoming disabled using CDA’s disability calculator, the Personal Disability Quotient (PDQ), at http://www.whatsmypdq.org.
About the 2012 Council for Disability Awareness Long Term Disability Claims Review
Since 2005, the Council for Disability Awareness (CDA) has conducted a proprietary annual review of long term disability claims among the U.S. working population. The 2012 CDA Long Term Disability Claims Review summarizes quantitative and qualitative long term disability insurance claims data from 2007 to 2011, gathered from the annual CDA member Long Term Disability Claims Survey. The report identifies continuing or emerging trends for the purposes of education, evaluation and use by interested audiences. Also included is selected worker disability data from the Social Security Disability Insurance (SSDI) program. Seventeen CDA member companies, representing over 75 percent of the individual and group commercial disability insurance market, contributed data for this survey.
About the Council for Disability Awareness (CDA)
The Council for Disability Awareness (CDA) is a nonprofit group dedicated to helping the American workforce become aware of the likelihood of disability and its financial consequences. The CDA engages in communications, research and educational activities that provide information and helpful resources to wage earners, their families, employers and others who are concerned about disability and the impact it can have on wage earners and their families.