The financial impact on individuals who become disabled can be extreme, yet many people mistakenly believe they're covered by government programs or that they can get by on their own. Employers agree their workers aren't realistic on this point: A recent Colonial Life survey showed 65 percent of employers didn't think their workers could maintain their current standard of living if they were unable to work for two or three months because of an illness or accident.

Statistics—from several national surveys—show they're right. Without disability insurance, the financial odds of a person being able to support himself if unable to work appear somewhat bleak.

More than 60 percent of American workers live paycheck to paycheck. Half of all households say they couldn't raise $2,000 within a month, if needed. Even among households earning $100,000 to $150,000 per year, less than a quarter can do so.

Counting all savings, investments and money in retirement accounts, six in 10 households have less than $50,000 of investable assets and a third have less than $10,000.

Disability more likely

People vastly underestimate their likelihood of becoming disabled. For instance, 64 percent of wage earners believe they have only a 2 percent (or less) chance of being disabled for three months or more during their working careers. This is far less than the 33 percent actual odds of a worker being disabled for at least six months, according to the Council of Disability Awareness.

Some of this discrepancy could be created by how people actually perceive disability. Many people think being disabled means being confined to a wheelchair due to a lifelong illness or medical problem. But in reality, 91 percent of disabilities are caused by common illnesses or health conditions, which typically aren't covered by workers' compensation. According to Unum's research, the most common reasons for disability leave are cancer, childbirth, heart attacks, muscle and bone disorders, strokes and surgery.

Most disabilities don't qualify under the federal Social Security Disability Insurance program. About 70 percent of first-time applicants are denied, and those who do qualify typically wait an average of two years before receiving their first payment. Could you go two years between paychecks?

Why workers don't buy

With the need for this protection so clear, why are so many employees not protected by disability coverage?

 1) They procrastinate. Like many types of individual, personal coverage, disability insurance typically is sold rather than bought. Many people postpone making financial decisions such as insurance purchases and won't proactively seek out insurance until they need it or it's too late. However, this indicates a great opportunity for you to initiate the conversation with their employers about the need for disability coverage and to offer options. Workers today still count on their employers to provide access to and information about the majority of their benefits. 

2)  They don't feel informed enough to make good choices. Insurance decisions aren't always simple ones. Often, people don't understand what type of policy to buy or how much coverage they need, and they worry about making a poor choice. Clearly, employees have a need for accessible, easy-to-understand benefits information from a trusted source. A good benefits communication plan can help solve this problem.

3)  They have other priorities. Today's economy has consumers watching their checkbooks more closely. They may be more likely to delay the purchase of additional insurance because they have other financial priorities (a higher-definition TV or the newest tablet computer, perhaps?) or feel they can't afford it. Complemented by benefits education that helps employees understand their financial exposure and needs, disability insurance offered through the workplace can be an affordable option that fits employees' budgets.

Offering a solution

With most workers today looking to the workplace for their benefits, employers are under pressure to provide a competitive benefits package while maintaining a strong bottom line. Voluntary, employee-paid disability coverage offers a solution that meets both employers' and workers' needs.

Voluntary benefits integrate with a company's core benefits and can help employers offer a cost-effective, expanded benefits package for their workers at little to no direct cost to the business. Employees choose the benefits that best meet their individual and family needs and typically pay for these products themselves through convenient payroll deduction. Individual voluntary policies are owned by the employees, so if they ever leave employment they can keep the coverage. Some voluntary benefits are available as group products.

Companies find voluntary products offer them many advantages:

Improvement in worker morale, satisfaction and productivity

No added direct costs to the company

The ability to attract and retain employees with more competitive total compensation packages

Improved loyalty by giving employees options to purchase less expensive insurance than they could get on their own

Voluntary disability coverage is widely available in both individual and group products. Coverage can be designed to mesh with the employer's existing benefits — for example, coverage would begin only after employees had exhausted all their sick leave. Plans can be offered with different levels of income replacement, elimination periods and benefit periods to ensure the coverage is affordable and valuable yet avoids any disincentive to return to work.

Communication is key

Certainly, most voluntary insurance—including disability—needs to be sold. But that doesn't mean pushed. What we're talking about here is helping employees understand what coverage they have, where they might have financial exposure based on their unique family situations, and the options available to them. That's why effective benefits education and communication is a critical component of any benefits strategy. 

The best benefits package holds little value if employees don't know about their coverage and understand how it works. Only 44 percent of employers say workers understand the need for disability insurance very well. Helping employees understand their insurance program improves the likelihood they'll participate. 

However, neither you nor your clients likely have the resources to implement a comprehensive, customized benefits communication plan that reaches each employee individually. And let's face it; you'd be giving up a sizeable portion of your commissions to hire an enrollment firm to do this for you. Don't let that stop you from making benefits communication a key component of the solution you present your clients. Instead, work with a benefits carrier that offers one-to-one counseling as part of its enrollment services at no extra charge. A provider that can enroll all employee benefits, including core benefits, also removes a major hassle for the employer.

One-to-one benefits counseling in the workplace contributes to stronger participation in a benefits program. Most employees—57 percent—say they want face-to-face interaction when buying insurance, and nearly 60 percent of employers believe one-to-one benefits counseling sessions can strongly improve employees' understanding of their benefits and overage needs.

Surveys of employees who meet individually with benefits counselors during their enrollments also prove the effectiveness of the one-to-one method. Virtually all employees (97 percent) surveyed by Colonial Life say personal benefits counseling improved their understanding of their benefits and that this type of communication is important (98 percent).

Tremendous opportunity

There's a strong need in the marketplace for disability protection. That means there's a strong opportunity for you, as well. You can help your clients provide comprehensive coverage that protects their employees with a strong financial safety net that includes the basics of disability coverage. This protection is too important to overlook, and today's voluntary plans offer a cost-effective solution for employers of all sizes.

Mike Keller is southwest region vice president of sales for Colonial Life & Accident Insurance Co.