In a 2010 consumer research study, the not-for-profit Council for Disability Awareness reported that American wage earners view income as their most valuable financial resource, yet most dramatically underestimate the average risk of disability. In addition, the research found that most wage earners have not planned to avert the financial consequences that an income-limiting disability can cause.
The disability discussion couldn’t be more important considering that difficult economic times have left many people poorly equipped to handle any income loss, according to Barry Lundquist, president of the council. “For nearly every wage earner, income is the source of all financial security; it’s why people work,” said Lundquist. “This is a basic financial education issue. Most wage earners are poorly informed about the risk of disability, which could cause them to lose their most important financial resource—income.”
Free Tool Available
The council is making it easier for employers and benefits advisors to help people learn about their risks of becoming disabled by offering a free printed Personal Disability Quotient (PDQ) calculator. The printable version, based on the council's online PDQ calculator, spotlights chances that a serious illness or injury might prevent a wage earner from earning an income for an extended period of time. It requires people to answer questions regarding their age, gender, occupation, medical conditions, lifestyle and tobacco use to estimate their chance of becoming disabled and unable to work for three months or longer before the age of 65. The tool estimates the time a person’s disability might last based on age.
Lundquist described the printed version of the PDQ calculator as simple to access, print and get into the hands of employees so that they can see the impacts of disability. "Employees can use the results to learn about what behaviors and characteristics impact and possibly lower the risk of disability, and to better take charge of their own financial security," he said.
First-Year Income Loss for a Critical Illness Tops $12,000, SHRM Online Benefits Discipline, September 2010
Winter Wellness Woes: A Flurry of Disability Claims, SHRM Online Benefits Discipline, December 2009
Short-Term Disability: Plan Design Affects Behavior, Outcomes, SHRM Online Benefits Discipline, July 2009
SHRM Online Benefits Discipline