Group Long-Term Disability:

The Respect It Deserves

by Kevin A. Roberts

There I was driving in traffic when my cell phone interrupted my singing. It was
the program chair of my chapter, who wanted to know if I could teach a CE class
on long-term disability at our meeting in two weeks. Sure, why not. I’ve been an in-
surance company representative selling LTD for most of my career and, ego aside, I
do fancy myself an expert. Just as a sommelier knows wine, I know the difference
between big, bold LTD and jug LTD.
As luck would have it, we had an approved course outline. Looking it over, I real-
ized that it was closer to a dusty old red than a clean crisp white. Perhaps some up-
dating was in order.
Now selling LTD from the perspective of the insurance rep or broker is all about
design, price and service. But, really, is that what this coverage is all about?
As I found out, it is about protecting risk. What often gets lost is
the importance of protecting that risk.
I found that in enrollment meetings it’s all about the
Medical plan, which is followed by a review of the den-
tal coverage. Everything else gets crammed in at the
end. Group-long term disability gets less time
than the dental coverage because everyone will
eventually plan to get their teeth cleaned. No
one plans to get disabled.
But has anyone ever lost their home
because they couldn’t pay their
dental bill?

Group-long term disability gets less time than the dental

coverage because everyone will eventually plan to get
their teeth cleaned. No one plans to get disabled.
36 • N O V E M B E R 2 0 0 7 HIU

Where in the World is HIU?
Jim Pipkin of the Dallas AHU with HIU at the Narrow
Gauge Railroad Museum in Portland, Maine.
38 • N O V E M B E R 2 0 0 7 HIU
Fewer than one in three U.S. workers have private LTD
coverage: 1
• 40% of white-collar, professional, technical and relat-
ed employees
• 22% of blue-collar, clerical and sales employees
• 11% of service employees
• 29% of all employees
Marketing results of LTD in recent years suggests that
these current market penetration figures are a fairly accu-
rate estimate of the saturation point for the group LTD
market. How can that be if we are all doing our job of pro-
tecting our clients from risk?
Most employees think nothing of insuring their car and
home, but what about insuring their paycheck? Chances
are one in 96 that you will need your fire insurance.2 Your
odds are one in three that you will be disabled by an illness
or injury for 90 days.3
What if you’re an independent woman and you have a
great job, great social life and a fabulous apartment—what
more could you need? How about disability insurance? A
30-year-old woman is 7.6 times more likely to become dis-
abled than she is to die at that age.4 Among workers with
disabilities in the U.S., 52% are women. 5
The Centers for Disease Control and Prevention list the
number-one cause of disability as cancer. Nearly a quarter
of all cancer claims are for breast cancer.6 Following cancer
are cardiovascular/heart disease, diabetes, arthritis & back
pain/injuries, musculoskeletal problems, injuries/poison-
ings and mental disorders.7 Ten percent of claims were for
complications of pregnancy.8 Some experts estimate that
babies will cost their new parents an extra $200 per month
or more.9 Anyone with children knows that $200 is barely
the diaper bill.
Personal behavior and lifestyle choices that lead to
problems are rapidly growing factors in causing long-term
disabilities. Picture a nation of Homer Simpsons holding
doughnuts and you rapidly visualize the potential need my colleagues in group LTD sales would just love you if
to cover this risk. you did. ■
Most people aren’t comfortable planning for the un-
expected, so they don’t do it. Personal savings rates aver-
aged 10.4% in the 1980s; in 2005, it was -0.5%. Kevin Roberts has over 20 years of group long-term
Americans are spending more than they earned— disability sales experience. He can be reached at
something that hasn’t happened since the Great kar925@comcast.net.
Depression.10 Average household credit-card debt is
$9,300—an all-time high.11 Unless you have the winning
Lotto ticket stashed somewhere, if you become disabled,
1 An Employer’s Guide to Disability Insurance, America’s Health Insurance Plans
you’re in big trouble. 2 National Safety Council, Injury Facts, 1994
A disabled employee has no paycheck. Disability 3 Commissioners Individual Disability Table A, Society of Actuaries, 1985
causes 50% of all mortgage foreclosures.12 No funding is 4 2005 Field Guide to Estate Planning, Business Planning & Employee Benefits, by
made to employees 401(k) plans because contributions Donald Cady, The National Underwriter Company
5 Cornell University 2005 Disability Status Report
must come from earned income.13 Nearly 60% of work-
6 Unum’s 2005 Annual Report on Disability Trends
ers have not discussed how they would handle income 7 JHA’s 2002 Risk Management Study
loss from disability.14 8 Unum’s 2005 Annual Report on Disability Trends
What about Social Security Disability Insurance? 9 Consumer Credit Counseling Service
Eligibility is based on a narrow definition. You must be 10 U.S. Department of Commerce, Bureau of Economic Analysis, February 2006
11 Parade Magazine, April 23, 2006
unable to perform any gainful employment, you must
12 Health Affairs, the Policy Journal of the Health Sphere, February 2005
have been disabled for five months, and the disability 13 Internal Revenue Service
must be expected to last 12 months or result in death. 15 14 CDA 2007 Disability Awareness Study
The truth is that your chances to get Social Security 15 Social Security Administration 2007 Annual Statistical Report
Disability Insurance are shrinking. 16 “Disability is Exploding,” by James F. Allsup
17 An Employer’s Guide to Disability Insurance, America’s Health Insurance Plans
• The 1995 claim-approval rate was over 50%, with 18 The Henry J. Kaiser Family Foundation, “Employee Health Benefits: 2005
Annual Survey”
an average processing time of five months. 16
19 Insurance Information Institute, 2005 & 2006
• In 2005, only 37% qualified for benefits. Because of 20 JHA’s 2005 U.S. Group Disability Market Survey
application backlog, the waiting time to receive
SSDI benefits is often two to three years. 17
Annual premium for family medical coverage reached
$10,880 in 2005.18 For the first time, the cost of coverage
was more than a year’s worth of earnings for minimum-
wage employees. The average cost for auto coverage is
$867, while homeowners are paying $677 per year for in-
surance.19 Compare that to group LTD’s affordable rates:
It averages $228 per employee per year.20
Use this as a visual for employers. To add group LTD
coverage for every employee in a 50-life group, the cost is
about the same as what it takes to cover one employee
for family medical coverage.
Consider the employer that has decided to change
coverage from a traditional PPO/HMO arrangement to a
consumer-driven high-deductible plan. The generous re-
duction in premium gives the employer the opportunity
to add group LTD as a way to offset the some of the neg-
ative reaction from employees.
Perhaps the finest sales advice I ever got was late
one night while watching a 1964 film of Woody Allen
giving a standup performance to a group of college
students. His immortal words: “What is success?
Success is overrated; 80% of success is just showing
up.” As a broker, just showing up with a disability
quote and painting the picture to employers of their
duty and benevolence (not to mention the affordabili-
ty) would easily cut into the saturation point that the
marketing surveys so freely tout.
So I finished the CE class with a slide stating “Go out
and sell some LTD!” Now, this may seem simplistic, but

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