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Many Workers Lack Disability Insurance

Armen Hareyan's picture

The New York Timeson Saturday examined how people of working age are "more likely tobecome disabled than they are to die prematurely, even though twice asmany people have life insurance as have disability coverage," industrystatistics show.

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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-termdisability insurance usually provides coverage for a week to two yearsafter a person becomes disabled. Long-term disability insurancegenerally provides between 60% and 80% of a disabled person's salaryfor two to five years or until the person retires.

Fradkin notedthat many employers who offer disability policies are shifting costs toworkers, while many insurers are reducing the benefits under theirplans. 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).

Reprinted with permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, afree service of The Henry J. Kaiser Family Foundation.