The Council for Disability Awareness

“The Risk and Consequence of Disability: Awareness, Need, Planning, Responsibility and

Opportunity”

Twin Cities DI DayOctober 22, 2009

Barry Lundquist, CLU

President

The Council for Disability Awareness

www.disabilitycanhappen.org“Raising Public Awareness About Disability”

Today’s Discussion

• Environment

• Disability Facts, Perceptions, Misconceptions

• CDA Refresher: Background, History, Overview

• Other CDA tools (What’s in it for you?)

• What’s New at CDA? (What’s in it for you?)

• Monica’s Story

• Call to Action: How can YOU help?

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The Disability Insurance Environment…

…is Evolving…Lots going on:

• Health care costs…Health care debate

• Shift to consumer driven benefits

• Decision making shifting

• Costs shifting

• Demographics

• Increasing incidence of disability

• Depleted Savings and Retirement accounts

• Workers embracing security

• Can Government fulfill its promises?

• Let alone take on more

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Disability: Facts, Perceptions, Misconceptions

• 54.4 million Americans reported some level of disability in 2005; roughly 1 of every 5

• Three out of 10 workers between 25 and 65 will experience a Disability of 3 months or longer

• One in 7 workers will be disabled for five years or more before retirement

• The average long-term disability absence lasts 2.5 years

• The chances of a 32 year old becoming disabled prior to retirement are 3.45 times greater than the chance of dying.

• Over 80% of physicians have disability insurance protection; what do they know that others don’t?

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Sources: U.S. Census Bureau, Commissioners Disability Table, 1998; Commissioners Individual Table A; Journal of the American Society of Chartered Life Underwriters; Social Security Administration Fact Sheet January 2007

Disability: Facts, Perceptions, Misconceptions

From CDA’s 2007 Disability Awareness Study:

• 90% of workers grossly underestimate chances of becoming disabled & potential length of disability

• 85% express little/no concern about becoming disabled

• 64% unaware of disability impact on 401(k) contributions

• Women are more aware of the risks, but less prepared than men

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Source: CDA’s 2007 Disability Awareness Study

80% of workers who have planned financially for disability are confident about their ability to maintain their current lifestyle if a disability strikes.

Disability: Facts, Perceptions, Misconceptions

• 58% of adults say that they are covered by disability insurance; only around 35% actually are covered

• 71% of workers say it would be very or somewhat difficult to meet their financial obligations if next paycheck were delayed for one week

• 70% of the private sector workforce has no long-term disability insurance

• 66% of agents say because clients don’t ask = why they don’t sell disability insurance

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Sources: JHA, National Payroll Week 2008 Getting Paid In America Survey, Social Security Administration, LIMRA

Disability: Facts, Perceptions, Misconceptions

From CDA’s 2008 Worker Disability Planning and Preparedness Study:

• 53%: ability to earn a living is most important contributor to financial security

• 86%: say workers should plan in their 20s and 30s for income limiting disability

• 82%: express concern about how they would pay bills if disabled

• 62%: don’t mention earnings as part of financial planning

• 54%: never discussed disability planning, how they would pay bills, etc.

• 57% have not discussed how to manage loss of income and have no plan

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Source: CDA’s 2008 Worker Disability Planning and Preparedness Study

“Cash is nice, but…”Employees value these benefits even more than cash.

Cash

Source: Sun Life Financial Voluntary Products Survey, 2009

Short-Term Disability

Life Insurance

12.9

Dental

22.0

401(k)

21.9

Long-Term Disability

Long-Term Care

Vision

14.5

Disability: Facts, Perceptions, Misconceptions

http://www.sunliferesearch.com/

Disability - a neglected risk… …overshadowed by health, longevity, pre-mature death risks

Lack of public awareness & dialogue about disability… …trends, financial impact, resources, healthy lifestyles

Slow response to a new era of personal responsibility… ...workers are increasingly in the risk the business …trend toward consumer driven benefits…choice and cost …most not adequately informed or preparing

The need for a credible information resource… …help the public understand disability risks and consequences and and the value of prevention, planning and protection

CDA was established by Disability Insurance leaders concerned about lack of public awareness and

understanding

--- CDA was chartered as a non-profit corporation in 2005 ---

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What is The Council for Disability Awareness?

1) the growing likelihood of disability occurring among the working population

2) the financial hardship that disability can cause wage earners and their families

3) the value of prevention and being prepared and planning responsibly in case a disability

prevents one from earning a paycheck

A disability insurance industry “public service” dedicated

to raising public awareness about…

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• CDA is about:

• Educating, communicating and raising awareness

• Helping workers, employers, advisors, family members, media members and any interested others understand the risk and impact of disability

• Helping workers avoid disability where possible

• Helping workers plan appropriately for the possibility of an income limiting disability

• CDA is not about:

• Selling

• Product

• Lobbying

A rising tide lifts all boats…

…John F. Kennedy

What is The Council for Disability Awareness?

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What is CDA Trying To Achieve?

1. Informs wage earners about the realities and financial consequences of becoming disabled and the need to plan accordingly

2. Gets the media’s attention about growing risks of disability

3. Encourages more advisors & employers to educate employees about disability risk management and planning

4. Establishes CDA as “ the credible resource” for information about disability awareness and preparedness

5. Institutionalizes “disability financial planning” - equal status with estate, medical, investment and retirement security planning

Conduct a public awareness campaign that:

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ThanksThanks To Our To Our CDA Member Companies…

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CDA Resources and Tools

• CDA Develops and Distributes Tools for:

• Employees

• Employers

• Advisors

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CDA is looking to carry out its mission of raising disability awareness among working Americans by communicating

directly with workers, but also by leveraging channels such as advisors, employers, the media, and insurance companies.

Other CDA Resources and Tools

Available at www.disabilitycanhappen.org:

• Disability Facts and Statistics

• 5 Questions Every Worker Should Ask

• Disability Awareness “Quick Quiz”

• Disability Planner

• Financial Security Plan

• Income Replacement Benefits Inventory

• Healthy Lifestyle Tips

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CDA Resources and Tools (cont.)

Available at www.disabilitycanhappen.org:

• Disability Studies and Surveys

• Long Term Disability Claim Studies: 2005, 2006, 2007, 2008

• Worker Disability – A Growing Risk to Retirement Security

• 2008 Worker Disability Planning and Preparedness Study

• 2007 Disability Awareness Study

• Real Life Stories

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CDA Resources and Tools (cont.)

What’s new at CDA?

PDQ – Personal Disability Quotient (March 2009)

Advisor Tool Kit (July 2009)

2008 Disability Claim Study (September 2009)

CDA in the News (Ongoing)

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What’s New? The PDQ Estimator

http://www.whatsmypdq.org/

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Designed to…

1. Engage 2. Educate 3. Empower

http://www.whatsmypdq.org/

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Engage: Turn them on by leading in with a different question

http://www.whatsmypdq.org/

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Educate: Use the PDQ estimator to raise awareness of the risk

PDQ Results Page

http://www.whatsmypdq.org/

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Educate: Use the EIQ estimator to show how much is at risk

EIQ Results Page

http://www.whatsmypdq.org/

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Action Plans Page

Empower: Turn awareness into action by integrating other tools

http://www.whatsmypdq.org/

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What’s New? Advisor Tool Kit – New Additions

www.disabilitycanhappen.org

Advisor Toolkit Screen Shot

Advisor Toolkit - PDQ Marketing Materials

www.disabilitycanhappen.org

Personalize the PDQFlyer; use the PDQ

Graphics

Advisor Toolkit - PDQ Web Buttons

www.disabilitycanhappen.org

ADD PDQ to Your Web Site

Advisor Toolkit - PDQ Flyer

www.disabilitycanhappen.org

What’s New? CDA 2008 Disability Claim Study

CDA Member Company 2008 Claim Results:

156,000 new LTD/DI claims approved in 2007

574,000 existing LTD/DI claimants

$7.9 Billion in paid claims (7% increase)

2008 CDA Long Term Disability Claims Review 76% LTD & IDI market share

CDA 2008 Disability Claim Study CDA Member Company 2008 Claim Results

2008 CDA Long Term Disability Claims Review 76% LTD & IDI market share

154,000,000 covered workers: + 15%

7,430,000 total disabled workers: + 58% (plus 1.8 million spouses and children)

890,000 new disabled workers in 2008: + 46%

2,320,000 applications: + 98%

38.4% approval rate in 2008

Average current backlog: 17 months

Average age: 51

Average monthly benefit: $1064

• 37% increase in rate of disability – 50% increase for female workers Source: SSA 2007/8 Annual Statistical Supplement.

Rate of worker disability… …continues to rise at an increasing rate…

SS Disability Trends: 1998 - 2008

SSDI Claim Approval Rate Declining

Percent of SSDI Claim Applications Approved

1994-2008

Number of SSDI Claim Applications Compared to Approvals – 1994-2009 (est.)

Source: www.socialsecurity.gov

Advisor Toolkit – Graphs and Charts Library

www.disabilitycanhappen.org

Graphs and Charts from the 2008 Claim Study have been

added to the toolkit.

Visitors may download the Graphs and Charts and

add them to presentations and marketing materials.

More to follow!

What’s New?Media Outreach: CDA in the News

Monica’s Story

Monica had it all by the age of 37 - a successful career in the financial field, a wonderful son, and big dreams for the future. She never dreamt that a disability would change her life forever…….

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Monica’s Story

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My Boy’s Haven

Monica’s Story

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A Canadian’s Dream Abode

Monica’s Story

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Our Prime Minister’s Manor

Monica’s Story

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California Dreamin’

Monica’s Story

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The Million Dollar Bracelet

Monica’s Story

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Humpty Dumpty Falls

Monica’s Story

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Think Safety First

Monica’s Story

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Life Happens

Monica’s Story

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The Penthouse Suite

Monica’s Story

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The Outhouse

Monica’s Story

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Jolly’s Follies

Monica’s Story

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Mr. George

Monica’s Story

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Casa Georgie

Monica’s Story

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HUMPTY DUMPTY THE BLONDE

• Humpty Dumpty had a slip and fall and all the king’s horses and the king’s greatest men continually attempted to piece Humpty back together again.

• They tried and they tried with all of their might and always put up such a valiant fight.

• To mend the young broken egg who crumbled like a shell, to piece back together the egg to make whole.

• We honor and cherish your gallant efforts to achieve a life again given to the woman in such dire need.

• By: Monica Soltes, April 2005

Monica’s Story

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As CDA Succeeds in Raising Disability Awareness…

Risk of “losing your ability to earn a living” is elevated to a most

important risk to protect

Wage earners will be prepared to understand & manage all the

financial risks associated with disability

Benefits decision makers (advisors, employers, employees) will

be better equipped to make best choices and

recommendations

Disability Planning will be an essential to every financial plan

“We” will deliver real value to the market place by creating more

personal financial security

Call to Action:…….What Can YOU Do To Help?

• Visit and use the CDA website

• Use CDA tools, data and information – and recommend them to others

• Discuss CDA: on Social Networking sites, in DI Forums, study groups, etc.

• Tell us what you need to inform and educate wage earners, employers and others – we will deliver!

• If your company(ies) are already supporting CDA – please tell them THANK YOU …and to keep doing it!

• If your company(ies) are not already supporting CDA – please tell them they must… we need all companies to join!

Barry Lundquist, CLU

The Council For Disability Awareness

75 Pearl Street, Suite 205

Portland, ME 04101

207-774-2634

www.disabilitycanhappen.org

The Council For Disability Awareness……a Rising Tide Lifts All Boats!

Thank

You!

Thank

You!