Carriers, advisers seek to tailor disability plans to help fit the times; While it is true that grocery bills trump insurance premiums for many American workers, some benefit advisers say the economic downturn is driving a voluntary surge.(Voluntary)

Byline: Elizabeth Galentine

Last summer, Jim Posey polled a client with 600 employees on their voluntary disability participation. Thirty percent were signed up. After the economic turmoil of the fall, that same group plummeted to 4% participation.

"They just couldn't afford it," says Posey, owner of Jim Posey Insurance in Tulsa, Okla. "Obviously they're going to pay for groceries before they pay for disability insurance."

Carriers are responding to the market by molding their voluntary disability offerings accordingly. In late April, Aflac reduced the number of hours required for an employee to be considered full time from 30 to 19. "I think we've all seen where sometimes employers in this environment might be reducing the hours their employees work, rather than having to do away with the employee..." says Karen Riedel, second vice president, product marketing. "So we believe that that's very relevant to today's environment."

What's also relevant is the overall shift from group to voluntary benefits, says Bob Risk, vice president, head of group protection sales for Lincoln Financial. "What we saw at the tail end of last year is some more traditional employer-paid groups have gone voluntary," he says.

According to a November 2008 MetLife survey, the top concern leading employees to feel they are not prepared for a financial crisis is "if a principal wage earner can no longer work because of disability."

Such a mindset makes the viability of disability insurance even more poignant, says Neal Lucchi, senior vice president, voluntary products with HM Insurance Group. "I've noticed in this current economic situation people seem much more sensitive right now, just how fragile they are from a paycheck to paycheck situation," he says. "I think that's always been one of the things that disability affords people is that protection that should - God forbid - something happen, they keep that income stream coming."