Is Disability Insurance a Luxury Good?

Almost 40% of consumers earning $25,000 - $50,000 reported in a pre-pandemic Council for Disability Awareness (CDA) consumer survey that their savings--if they had any--would last less than one month if they couldn't work due to an injury, illness, or pregnancy. Yet, according to the Bureau of Labor Statistics, only 20% of the lowest 25% of wage earners had access to employer-paid short-term disability insurance and only 10% were offered employer-paid long-term disability insurance. 

In contrast, 56% of the highest 25% of employees had access to employer-paid short-term disability coverage and 60% had access to employer-paid long-term disability insurance. 

Fred Schott, who runs research for The CDA, said, “Through our survey, we learned there is a much greater risk for lower-to- moderate income consumers to withstand the financial shock of not receiving a regular paycheck because of an injury, illness, or pregnancy. These findings tell us that the challenge lower-to-moderate income consumers face is more than just a matter of disability insurance access and affordability. It’s a matter of financial wellness.”