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CDA 2011 Advisor Disability Awareness Study
The Disability Divide: Advisor Study

The gap between consumers' attitudes - and advisors' perceptions of those attitudes - about disabilities and their potential threat to their financial security.

Income Sources in Event of Disability

Consumers think they'd rely on paid vacation / sick leave for income.
Advisors predict consumers would sell their possessions.

When asked what source they'd likely tap in the event they became disabled and couldn't work, over 40% of consumers said they'd rely on employer-funded sick/vacation leave.

Other perceived top sources of income include disability insurance payments, a spouse's or partner's income, and debt. But many of the sources cited are probably not sufficient to cover living expenses for an extended period.

Most consumers (65%) said they could not survive financially for more than one year without income.

What's also interesting to note is that Gen Y respondents were more likely than other groups to consider tapping into their retirement savings - not likely to be a significant asset at this stage in their careers.

Advisors predict their clients would rely on completely different income sources than those actually cited. In fact, consumers' top pick - sick pay and vacation - ranked seventh out of 10 choices on the advisors' list.

Interestingly, "disability insurance payments" ranked fifth on the advisors' list versus second on the consumers' list. Perhaps some consumers' overestimate their coverage - others think they have coverage when they really don't. Advisors typically recognize that many consumers' incomes are not well enough protected, or not protected at all. Most consumers have not thought much about how they would replace their most valuable financial resource - their income, and most overestimate their ability to maintain their lifestyle for any extended period of time should they suffer an income loss.

Recognizing that income protection planning is inadequate, advisors are far more pessimistic - or perhaps realistic - about how long consumers can last without income.
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