CDA 2010 Consumer Disability Awareness Survey

The Disability Divide:

The gap between what employees believe-and how they act-about the potential for an income-threatening disability.

THE STATE OF DISABILITY IN AMERICA

Continued economic volatility. Rising home foreclosures. Eroded retirement accounts. Stubbornly high unemployment. All have heightened American workers’ sensitivity to the need for a reliable stream of income and financial security. Yet most don’t realize a disability could interrupt their income-and fewer still are protected from that loss by adequate savings, private insurance OR government programs.

Just consider these recent statistics on disability in America.

Over 10% of Americans between the ages of 18 and 64 have a disability1

8.1 million U.S. workers receive Social Security

Disability (SSDI) benefit as of October 20102

Nearly 90% of disabilities aren’t work-related

and therefore don’t qualify for workers’ compensation benefits3

Applications for Social Security

Disability Benefits (SSDI) increased 21%

from 2008 and are projected to increase in 2010 as well4

Only 35% of initial SSDI applications

were approved in 20094

100 million Americans are not protected

by private disability insurance5

1U.S. Census Bureau, Selected Social Characteristics in the United States: 2009. 2SSA Beneficiary Data, October, 2010. 3National Safety Council,

Injury Facts, 2008 edition. 4Social Security Administration, Office of Disability and Income Security Programs. 5Council for Disability Awareness,

Long-Term Disability Claims Review, 2005.

How aware are today’s employees of their chances of facing an incomeinterrupting

disability? And how prepared are they to deal with the financial

consequences if they do experience one? Those were just two of the key

questions the Council for Disability Awareness (CDA) set out to address in

its 2010 Consumer Disability Awareness study.

To answer these important questions, the Council for Disability Awareness (CDA) conducted

an online survey with a nationwide panel of wage-earning consumers. These questions were

designed to:

• Understand workers’ perceptions about disability
• Identify actual behaviors related to these perceptions
• Determine the level of preparation workers have taken to protect themselves

and their families from the risk of suffering a disability

• Learn to what extent workers are positioned to deal with an income loss caused

by an illness or accident

We hope the insights gleaned from this research will help employees, employers and financial

advisors alike bridge the divide between what employees think and what they do-as well as

between what they perceive and what is real. It’s this divide that leaves too many Americans

and their financial security at risk from a disability-triggered loss of income.

Survey Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Summary of Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Divide #1: Beliefs about disability . . . . . . . . . . . . . . . . . . . . . 4

Divide #2: Overall odds of becoming disabled. . . . . . . . . . . 5

Divide #3: Causes of disability . . . . . . . . . . . . . . . . . . . . . . . . 6

Divide #4: Protection against disability. . . . . . . . . . . . . . . . . 8

Divide #5: Duration of disability . . . . . . . . . . . . . . . . . . . . . . 9

Divide #6: Preparation for disability . . . . . . . . . . . . . . . . . . 10

Divide #7: Income sources in event of disability. . . . . . . . . 11

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

CDA 2010 Consumer Disability Awareness Study

2

This research study conducted in

March 2010 analyzed the responses of

1,006 representative employees who

met the following four screening criteria:

• U.S. residents

• Employed full-time

• Between the ages of 18 and 68

• Household income of $30,000 or more

Participants were part of MarketTools ZoomPanel

and each participant received an incentive from

MarketTools to participate in the survey. All

respondents took the survey between March 23

and March 26, 2010. The CDA 2010 Consumer

Disability Awareness Survey was conducted online.

RESPONDENTS BY GENDER

RESPONDENTS BY INCOME LEVEL

52%

Females

48%

Males

> $25K

$25-49K

$50-99K

$100-149K

$150-249K

$250-500K

$500+K

RESPONDENTS BY AGE

18-24 3%

7%

10%

9%

17%

13%

19%

11%

11%

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60+

2%

23%

47%

17%

8%

2%

1%

Overview of survey methodology

CDA 2010 Consumer Disability Awareness Study

The results of the 2010 Consumer Disability Awareness Survey highlight one key fact: most

individuals still underestimate or deny their own chances of becoming disabled. Even more

noteworthy, and quite frankly, more troubling, they underprepare for the potentially devastating

financial impact on themselves and their families. Here are some other aspects of the great divide

this research identified between workers’ general perceptions about disability-and their

willingness to prepare for what it could mean to them personally.

“It’s likely to happen, but not to me.”

83% said a disability could happen to anyone at any time but deny it will specifically happen to them.

“My income is critical, but protecting it isn’t.”

90% say they value their ability to earn an income, but almost 40% said they haven’t thought about

how they would protect this all-important financial resource.

“I think disabilities tend to last a year or more, but I could only cover my bills for

three months or less.”

Almost 70% of survey respondents said a disability would keep a person out of work for more than

one year, but 38% said they could only pay bills for three months or less if they lost their income.

“I think most disabilities are caused by accidents.”

More than 70% say a disability (which prevents them from working) would likely be caused by a serious

accident, when more than 90% of disabilities are actually caused by illness.

“My chances of becoming disabled are slim.”

44% say they have about a 1% chance of becoming disabled during their working years. Yet the

chances are actually about 30% that workers in their 20s will experience a long-term disability prior

to retirement.

“If I get sick, my benefits will cover my expenses.”

42% said their primary source to replace lost wages would be money from sick/vacation leave benefits

from their employer. But these benefits are poorly understood and typically last only a matter of weeks.

While it appears that workers generally seem to understand the potential long-lasting impact a disability

may cause, many avoid taking actions that could help them personally deal with that impact. This and

other key findings about “the disability divide” between employees’ perceptions and reality as well as

their beliefs and actions are detailed on the following pages.

Highlights of survey findings

3

CDA 2010 Consumer Disability Awareness Study

A significant number of respondents

consider themselves less vulnerable to

a disability than the population at large.

This may indicate an inability, even an unwillingness,

for most people to view their present health (which they

tend to rate as “good”) as something that is susceptible

to change. In short, they’re “in denial.”

What’s also interesting is that women rank the average

American’s likelihood of becoming disabled higher than

men did. Yet women rank their own odds of becoming

disabled lower than men do. So on average, women

think men are more likely to become disabled when

in reality, at most ages, women are more likely to suffer

from one.

83% of respondents think that a

disability could happen to “anyone

at any time.”

• Only 5% of the survey’s respondents said it

happens infrequently.

• Probably because most respondents viewed

disability as “accidental,” only 6% think that

they can do anything to avoid it, such as living

a healthy lifestyle.

Employees believe

that others can become

disabled at anytime.

Employees deny

that disabilities are likely

to happen to them.

RESEARCH FINDINGS:

% of respondents who selected each of the following statements as reflective of their own beliefs about disability

83%

“Most people who become disabled have inherited certain traits

that cause them to be that way.”

“Disabilities are usually the result of someone being careless.”

“It happens infrequently.”

“Most disabilities can be avoided through healthy lifestyles.”

“Other

6

5

3

2

1

“It can happen to anyone at any time.”

4

CDA 2010 Consumer Disability Awareness Study

The Social Security Administration

estimates that 3 out of 10 Americans

entering the workforce today will

become disabled before they retire.

This statistic is supported by the Council for Disability

Awareness Personal Disability Quotient (PDQ)

calculator as well as publicly available actuarial

tables. See www.whatsmypdq.org for details.

The PDQ calculates the odds of being disabled for a

healthy 35- to 45-year-old male during his working

career as about 1 in 6.*

*Calculated by the Council for Disability Awareness’ “Personal Disability

Quotient” (PDQ) for males, 5′ 10″, 185 pounds, with no tobacco use and

about average health.

Workers significantly underestimate

either others’ or their own chances of

becoming disabled.

• Over half of survey respondents think only one in

100 or one in 50 working Americans are likely to

become disabled during their working careers.

• Only 7% of the survey respondents came close to

predicting their chances accurately.

• Those who knew someone who had been disabled

were much more likely to think there was a higher

chance they’d become disabled. In fact 27% of this

group thought their own odds were at least 1 in 10.

Employees estimate

only 1% will become

disabled before retirement.

Actuaries project

the odds of being disabled

at least 10 times higher.

RESEARCH FINDINGS:

respondents’ estimate of the chances of becoming disabled

31%

23%

23%

14%

5%

4%

1 in 100

1 in 50

1 in 25

1 in 10

1 in 5

1 in 3

the “average”

American

44%

20%

14%

10%

5%

7%

INDUSTRY STATISTIC:

actual chances that an employee entering

the workforce will experience a long-term

disability prior to retirement

% of respondents who

believed these were the odds

of becoming disabled for:

“me”

odds of

becoming

disabled

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CDA 2010 Consumer Disability Awareness Study

Disability insurance industry statistics report

that fewer than one out of 10 long-term

claims actually result from injuries.

The CDA 2010 Long-Term Disability Claim Review reports:

• More than one out of four income-interrupting

disabilities are triggered by muscle and bone disorders

such as back problems, joint pain and muscle pain.

• Cancer is the second leading cause of new disability

claims, representing 15% of all claims.

• Cardiovascular/circulatory problems have increased

slightly and are now the third leading cause of new

and existing disability claims.

• Most disabilities are not work-related, and therefore

not covered by workers’ compensation.

• Lifestyle choices and personal behavior that lead to

obesity are becoming major contributing factors.

71% of respondents believe

that disability is most likely caused by

serious accidents.

In general, employees tended to see disability as

resulting from a more “catastrophic” cause-serious

accidents, stroke, cancer, heart disease and paralysis.

They tended to overlook more commonplace causes

such as muscle or bone pain and chronic disease.

• 45% of employees cited a stroke as a likely cause

of disability.

• 43% said cancer was a likely cause.
• 40% said heart disease would cause a

potential disability.

Employees think

most disabilities are

caused by injuries.

Serious accident

71%

Injuries

9%

EMPLOYEE PERCEPTIONS:

% of employees who think disabilities are very or

somewhat likely to be caused by a serious accident

INDUSTRY STATISTICS:

% of long-term disabilities that were actually

caused by injuries and poisoning accidents in 2009

Studies show

most disabilities are

caused by illnesses.

Source: The CDA 2010 Long-Term Disability Claim Review.

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CDA 2010 Consumer Disability Awareness Study

THE DISABILITY DIVIDE: CAUSES OF DISABILITY (CONTINUED)

Attitudinal differences by gender

Men and women have a somewhat different view of

what would cause disability.

In general, women think their own chances of

becoming disabled are lower in six out of 10

categories than their male counterparts. Even so,

they estimated their own chances of becoming

disabled higher than men in four categories:

• serious accident
• cancer
• muscle or bone pain
• depression/anxiety

Attitudinal difference by income

While few employees named lifestyle and substance

abuse as likely causes of disability, it’s interesting to

note that both were cited more often by respondents

who earn $250,000 or more per year.

EMPLOYEE PERCEPTIONS:

% of employees who rated each cause for

disability as “very” or “somewhat likely”

Serious accident

Stroke

Cancer

Heart disease

Paralysis

Injuries at work

Muscle or bone pain

Depression/anxiety

Lifestyle

Substance abuse

26% Musculoskeletal/Connective Tissue Disorders

15% Cancer and Neoplasms

9% Cardiovascular/Circulatory Disorders

9% Injuries and Poisoning

8% Complications of Pregnancy, Childbirth

and the Puerperium

8% Mental Disorders

7% Nervous System-Related

4% Other

3% Digestive System-Related

3% Symptoms, Signs and Ill-Defined

2% Respiratory System Disorders

2% Genitourinary System Disorders

1% Endocrine, Nutritional and Metabolic

Diseases and Immunity Disorders

1% Infections and Parasitic Diseases

1% Skin and Subcutaneous Tissue Disorders

71%

40%

32%

32%

14%

12%

8%

INDUSTRY STATISTICS:

% of new long-term disability claims caused

by each of the following

“New” claims are those approved in the survey year.

Source: The 2010 CDA Long-Term Disability Claim Review.

45%

43%

26%

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CDA 2010 Consumer Disability Awareness Study

Employees do

believe a disability would

interrupt their income.

Employees don’t

have the resources to

replace that income.

More than half said they’d only be able

to pay their bills for a year or less if their

income stopped.

For most, an income-limiting disability would most

likely result in the rapid depletion of their resources.

In fact, 65% said that they would only be able

to pay bills for less than a year if their income stopped.

And when asked where income would come from to

pay bills, many responses seemed vague and dubious.

Other findings support how unprepared most

Americans are to deal with an interruption in income.

• Many U.S. families spend more than they earn.1
• Only 40% of adult Americans have savings

ear-marked for emergencies.2

• 71% of American employees live from paycheck to

paycheck,3 without enough savings to cushion the

financial blow of a disability.

More than half of the survey respondents

equated disability with the inability to work

for a living.

• 57%, or more than half, of the workers surveyed

said that to be disabled would mean they would

be unable to work.

• 30% had the most negative view of disability as

being “incapable of functioning.”

• While only a few believed that a disability would

mean the “end of life worth living,” almost all

had a catastrophic view of disability.

EMPLOYEE PERCEPTIONS:

% of people who define disability

as each of the following

EMPLOYEE REALITIES:

% of respondents who could continue to pay bills

with no income

Not being

able to work

More than

1 year

Less than

1 year

Incapable of

functioning

Unable to do

what is normal

Depending on

others for help 13 57% %

35%

65%

10%

5%

1Federal Reserve Board, Survey of Consumer Finances, 2004.

2Consumer Federation of America, national survey by Opinion Research Corp., Feb. 2007.

3American Payroll Association, “Getting Paid in America” Survey, 2008.

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CDA 2010 Consumer Disability Awareness Study

Employees think

most disabilities will

last a long time.

Studies show

most don’t have long-term

disability protection.

Nearly 70% of respondents think a

disability would keep a person out of

work for more than one year.

Workers surveyed believe that if a person becomes

disabled, he/she will be out of work for a lengthy period

of time. In fact, more than two-thirds of respondents

thought that a disability would put a person out of

work for a year or more. And almost one-third said

that person would never return to work.

70% of employees in the private sector

are not covered by any type of private

long-term disability insurance.1

In fact, even when offered as a voluntary benefit by

their employers, almost 40% of workers don’t choose

long-term disability insurance.2 And barely 30% claim

to understand it very well.2

Even the likelihood of receiving government benefits

from the Social Security Disability Insurance program

(SSDI), which could cover a person after a severe

disability that is expected to last a year or more or

result in death, is dwindling. Although most private sector

employees are covered by SSDI, benefits are limited.

• The average monthly SSDI benefit amount in 2009

was $1,064, with 56% of recipients receiving less

than $1,000 per month.3

• It is very difficult to qualify for SSDI benefits. 65% of

initial benefit applications were denied in 2009,3 and

the appeals process can last up to four years.

• SSDI approval rates have steadily declined in

recent years.4

1Social Security Administration, Fact Sheet, Jan. 31, 2007.

2CDA 2008 Worker Disability Planning and Preparedness Study.

3Social Security Administration, Disabled Worker Beneficiary Statistics, ssa.gov.

4The 2010 CDA Long-Term Disability Claims Survey.

EMPLOYEE PERCEPTIONS:

% of respondents who believed that a disability typically

lasts the following lengths of time

1%

7%

14%

9%

20%

9%

8%

31%

Less than 1 month

1 to 3 months

4 to 6 months

7 to 11 months

1 to 2 years

2 to 5 years

More than 5 years

Most likely never

to return to work

68%estimated

more than one year

Nearly 1 out of 3 estimated that

a disability would prevent someone

from ever working again

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CDA 2010 Consumer Disability Awareness Study

Employees do think

their ability to earn an

income is valuable.

Employees don’t think

about taking steps to

protect that income.

While nearly all employees say their ability

to earn an income is important, fewer than

40% have thought about protecting it.

When asked about how they’ve prepared for a potential

disability, survey respondents generally admitted

that they’ve not taken much action to prepare.

• The most common answer, given by 37% of the

respondents, was “I’ve never really thought about it.”

• Only 22% said they don’t think about it because they

have disability insurance.

90% of respondents rated their ability

to earn an income as “valuable” or

“very valuable.”

Clearly, workers highly value their ability to earn

an income. In fact, almost all respondents rated

this ability as more valuable than other financial

resources which help them achieve financial security,

including retirement savings, personal possessions,

homes and medical insurance.

HOW EMPLOYEES ACT:

% of respondents who are prepared for a disability

WHAT EMPLOYEES VALUE:

financial resources rated valuable by respondents

Retirement savings

Home

Savings and investments

other than retirement savings

Medical insurance

Other insurance

Personal possessions

90% 37%

43

57

76

77

79

80

“I don’t think about it because

I have disability insurance.”

“Disability won’t last long, so

there’s no real need to plan.”

“I have enough savings to cover

my bills.”

13

20

22

Ability to earn an income

“I’ve never really thought about

protecting my income.”

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CDA 2010 Consumer Disability Awareness Study

Employees think

they’re covered for income

loss by some other source.

Employees don’t realize

they can’t count on outside

sources of income.

Sick leave and vacation are typically

short-term solutions that run out in a

matter of weeks.

Other top answers employees gave also seem to reveal

a lack of understanding about what income sources

could actually pay the bills in the event they

became disabled.

• 36% cited a partner’s income as a source of income.

But if two incomes are needed to meet expenses,

simply relying on just one most likely wouldn’t be

enough, at least for a time. In addition, many spouses

take on a caregiver role and work less when the other

becomes disabled.

• 34% said they would take on more debt. But there’s

little chance of qualifying for a loan when someone

is disabled and unable to earn an income to pay the

money back. While credit card debt was also cited

as an option, it is notoriously expensive, and would

be difficult to pay off because, again, there would

be no income to make required payments.

EMPLOYEE REACTIONS:

Where would the money come from to pay bills?

Source of Income % ranked 1st, 2nd or 3rd highest

Employer payments for

sick leave and vacation

Disability insurance

payments

Your spouse or

partner’s income

Debt

Help from friends

or family

Selling possessions

Retirement savings

account

Government programs

Household savings

34%

32%

32%

30%

24%

38%

42%

36%

31%

11

When asked what source they’d likely tap in

the event they became disabled and couldn’t

work, 40% of employees said they would

rely on employer-funded sick/vacation leave.

Other perceived top sources of income included

disability insurance payments, and a spouse’s or partner’s

income and debt. But most responses seemed “off the

cuff” and many of the sources cited are probably not

sufficient to cover living expenses.

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.

CDA 2010 Consumer Disability Awareness Study

CONCLUSION

The findings highlighted in this report suggest that consumers like you need to

become better educated on how likely it is that an illness or injury could force you

out of work, and to get better prepared for what you can do to mitigate this loss.

Consider these steps to help understand the devastating consequences of a

disability-and enhance your financial preparedness.

Learn more about disability.

Consumers need more of an education to: 1) correct the many misconceptions surrounding disability;

and 2) learn about what you can do to lower the risk of its financial impact. An enlightening and

easy-to-use online tool called the Personal Disability Quotient available from the CDA at

www.whatsmypdq.org can help raise your awareness.

Know your benefits.

Our findings showed that the workers in this survey have a poor understanding of their benefit

programs and incorrectly think vacation/disability paid leaves will get them through an extended period

of no income. Spend time reviewing what disability benefits you already have through your employer,

how each one works and the maximum benefit you’re entitled to receive from each one. Determine your

sources of post-disability income, and whether they will be sufficient to meet your financial obligations

in the event that a disability forces you to stop working for a time.

Take action.

Although the survey showed that workers claim “disability can happen to anyone at any time,” they

haven’t taken any steps to prepare themselves financially. Make sure you take charge of your own

health-both physical and financial.

Talk to an expert.

This study showed that overall knowledge for disability planning among workers is not sufficient.

And judging by how few have taken action, it doesn’t appear to be very highly valued either. Partner

with financial experts, human resource professionals at work and other trusted advisors who can

help you design, implement and communicate appropriate solutions to protect your income-and

financial security.

Resources

www.whatsmypdq.org

www.disabilitycanhappen.org

email: feedback@disabilitycouncil.org

phone: 207-774-2634

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CDA 2010 Consumer Disability Awareness Study

www.disabilitycanhappen.org