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The ability to earn an income is arguably someone’s most important financial asset. While no one thinks a disability could happen to them, the risk and implications suggest otherwise. According to the Social Security Administration, today’s 20-year-olds have a 1 in 4 probability of becoming disabled during their working years.¹ Furthermore, the National Library of Medicine found that 44% of people who filed for bankruptcy — and agreed that medical expenses played a contributing role — cited illness-related work loss.²

The 2025 Insurance Barometer Study, conducted by LIMRA and Life Happens, reveals the implications for consumers who become unable to work due to injury or illness without disability insurance. The results show more than half (51%) say they would rely on their personal savings should they lose the ability to earn an income, and 32% would turn to their family to keep financially afloat. The study finds more than a quarter (26%) would draw from their retirement savings accounts — potentially undermining their future financial security in retirement — and 1 in 5 say they would take out loans or use their credit cards to get by.

Employer-provided disability insurance can help

The workplace is a great source for both short and long-term disability insurance. The 2025 BEAT Study: Benefits and Employee Attitude Tracker shows that half of employees find having disability benefits available to them at work very (or extremely) important. The 2025 Harnessing Growth in Workforce Benefits Study, from LIMRA and EY, found that 63% of employers believe their employees would be very interested in short-term disability benefits in the future, while 58% of employers believe the same about long-term disability.

While it’s clear that both employers and employees see the value of short and long-term disability benefits, The BEAT Study finds that just 55% of employees can say definitively whether their employer even offers disability insurance, and less than half of workers say they have a strong understanding of these benefits. This highlights a crucial need for more communication about disability benefits, as poor understanding could discourage employees from enrolling in or maintaining these coverages.

LIMRA research finds that employees who previously had coverage but dropped their disability insurance cited the following reasons: increasing costs (31%), not using the benefit enough to be worth it (30%), and wanting to reduce overall benefit spending (27%).

If employers communicate more regularly about their disability insurance offerings, they may increase both awareness and participation in these benefits. Highlighting the financial risks of not having coverage in place could help employees reconsider dropping their disability coverages. Overall, 73% of employees say they would prefer to receive communications about their benefits throughout the year, according to LIMRA.

Paid family or medical leave offers another option to protect a worker’s income

LIMRA and EY data found that 7 in 10 employers believe their employees would be very (or extremely) interested in paid family or medical leaves in the future. These plans could affect how employees engage with short-term disability insurance, but both offerings could work together.

Every May, the financial services industry commemorates Disability Insurance Awareness Month to elevate the importance of protecting one’s income. Employers, carriers, and brokers can all play a role in helping employees ensure their incomes are protected in case of a disability.

¹ Disability and Death Probability Tables for Insured Workers Who Attain Age 20 in 2024, Social Security Administration, 2024.

² Medical Bankruptcy: Still Common Despite the Affordable Care Act, National Library of Medicine, 2019.

Join the conversation with us this Disability Insurance Awareness Month

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