Number of People With Individual Disability Insurance Stalls
But data from Warren Buffett's reinsurer found that new policy figures increased.
Few high-income U.S. clients have much protection against injuries or illnesses that could cost them the ability to earn a living.
Only 3.1 million U.S. adults had individual disability insurance in 2023, according to new data from Gen Re.
The number with their own coverage was the same as in 2022. The number of people with new policies increased 4%, to 275,235, but policy lapses offset new policy sales.
What it means: About 30 million U.S. adults live in households with monthly income over $17,000.
The Social Security Disability Insurance program has a 2024 monthly benefit limit of $3,822, according to Evans Disability.
Only about half of U.S. employers offer group disability benefits programs, and the maximum monthly benefit at those is less than $10,000 per month.
The figures suggest that about 90% of high-income clients who come to a typical financial professional will have no disability insurance or insurance that’s too skimpy to replace 60% of the client’s pre-disability income.
If the group disability coverage lacks a portability provision, and a struggling client stops working before applying for group disability, the client may lose access to the group disability benefits.
Gen Re: Gen Re is a reinsurer, or insurance company for insurers, that protects disability insurance issuers against catastrophic claims and big surges in claims.
It’s part of Berkshire Hathaway, the family of companies created by Warren Buffett.
Like many other reinsurers, it provides consulting services along with reinsurance, and it publishes some of its data to educate people and promote its services.
A complete version of the individual disability market report is available to the 17 insurers that participated in the survey.
Finances: The participating insurers reported generating $490 million in new individual disability sales in 2023 and providing $1.6 billion in benefits through the new policies
Premiums from new sales increased 7%, and the benefits sold through the new sales rose 9%.
The participating insurers collected $5.4 billion in individual disability insurance premiums for providing a total of $20 billion in coverage.
Both total in-force premiums and total in-force benefits increased 2%.
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