Guardian Survey: Fear of Losing Income Due to the Economy Equals Fear of Losing Income Due to Disability

Friday, May 30, 2008 General News
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NEW YORK, May 29 Despite job-security worries stemmingfrom current economic conditions, it appears that U.S. employees are just asconcerned about the possibility of losing their ability to earn an income dueto an unexpected illness or injury, according to a recent survey fromBerkshire Life Insurance Company of America (Berkshire), a wholly-owned stocksubsidiary of The Guardian Life Insurance Company of America (Guardian).

In a sign that consumer fears about disability (its likelihood and impacton one's standard of living) are top of mind, 28% of employees are extremelyor very concerned about losing their income within the next 6 to 12 monthsbecause an accident or illness would make them unable to work. In comparison,a nearly equal number (25%) are concerned about losing their jobs within thenext 6 to 12 months due to economic conditions.

Other findings revealed in the study, Insurance & Behavior: Life WithoutIncome:

"Regardless of their marital status or ethnicity, employees are clearlyconcerned about their income security," said Larry Hazzard, Berkshire's SeniorVice President, Product & Marketing. "They understand that their quality oflife depends on it. And, while most employees have access to unemploymentinsurance if their job is downsized, are they adequately protected if theycan't work because of a stroke, cancer, heart attack or back injury?"

While this may seem like an easy solution, it comes with its own set ofrisks, Hazzard noted. "Taking money from your retirement accounts before youretire is like robbing yourself to pay yourself. It's generally not a goodidea to stop contributions to your retirement accounts because you lose out oncompound interest and your employer match too. If you have the rightdisability protection in place then you won't have to worry about liquidatingor discontinuing your retirement savings because of a debilitating injury orillness."

Offered by a few insurers, including Berkshire(,retirement income protection insurance enables employees and business ownersto continue making contributions to retirement accounts if they are unable towork due to injury or illness.

Mortgages and Retirement at Risk -- It Isn't Just a Sub-Prime/EconomyIssue

"The sub-prime mortgage crisis placed a spotlight on how a spike inmortgage rates put American families in financial peril," noted Hazzard."Going without group or individual disability coverage can have even graverconsequences for an ill or injured employee who has to stop working. If yourmortgage increases unexpectedly, your ability to pay for shelter is at risk;if you lose your income and aren't independently wealthy, you can't pay formuch of anything."

Can I Afford Disability Insurance When Gas is $4 a Gallon?

Some personal finance articles and news reports have suggested thatdisability insurance is expensive. But disability insurance, particularly acombination of group and individual coverage, can be very affordable.

"Our research shows that many employees overestimate the cost ofdisability coverage," said Barry Petruzzi, 2nd vice president, Group Life andDisability, Guardian. "Most employees can secure group coverage for just a fewdollars each month and then supplement their discounted group insurance with arobust individual or voluntary (employer sponsored, employee-paid) policy.Most employees and business owners can purchase a top quality individualpolicy for significantly less than what they spend on gas each month. Andmost workers can purchase a group policy for less than what they spend on adaily-dose of coffee each month!"

"The point is," Petruzzi concluded, "in challenging economic times it ismore important than ever to ensure your greatest asset: your ability to earnan income."

Guardian and Berkshire commissione

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