THE BRAVE NEW WORLD OF DISABILITY INSURANCE
Friday, September 19th, 2014
Kudos for Rob Lieber at the New York Times for an insightful and chilling piece on the financial perils now facing us in what he calls “personal finance land.” Lieber skillfully draws the parallel between three key financial products that have morphed from generously funded and managed by employers into three clusters of disaster: pensions, which became the retirement fund industry, health insurance, which needs no explanation, and now, disability insurance.
These three are the critical legs on the stool of financial health. And none of them are particularly sturdy. Our practice focuses on disability insurance claims, so we see the world through this prism.
Disability insurance, which was designed to support those who cannot work because they have suffered, in Lieber’s spot-on description, “truly wretched illnesses or injuries,” has moved into the same disastrous territory.
While many employers still provide access to disability insurance policies, they are rarely covered by employers. And the insurance companies have taken note –as described in several blogs, many insurance companies now offer the opportunity to get less coverage, for less money. They call these plans “flexible.” We call them a potential for utter economic disaster.
The onus used to be on the employer, who, in return for paying a living wage and providing solid benefits, supported their employees in sickness and in health. In doing so, an entire country enjoyed the side effects of a productive and cared-for populace.
We can’t comment one way or another on the potential impact of a start-up company out of Brooklyn (where else?) called Policy Genius, but we applaud their trying to make common sense out of a financial product that has always been confusing and is now in the same territory as the mutual fund industry- buyer beware, and if anything goes wrong, well, the suits made money.