Nearly Half of Employees Lack Disability Insurance

People of working age are "more likely to become disabled than they are to die prematurely, even though twice as many people have life insurance as have disability coverage," industry statistics show, the New York Times reports.

One-third of 20-year-old workers today will become disabled before they reach the retirement age of 67, according to the Social Security Administration.

Michael Fradkin, vice president for disability product management for the Metropolitan Life Insurance Company, said that about 42% of workers have no short-term or long-term disability insurance.

Short-term disability insurance usually provides coverage for a week to two years after a person becomes disabled. Long-term disability insurance generally provides between 60% and 80% of a disabled person's salary for two to five years or until the person retires.

Fradkin noted that many employers who offer disability policies are shifting costs to workers, while many insurers are reducing the benefits under their plans.

Chronic illness is the leading cause of worker disability, according to a 2007 study for the Life and Health Insurance Foundation for Education (Chura, New York Times, 6/30).