Wednesday, June 18, 2014

Average Age of Disability Claims Rises to Above 50

The Council for Disability Awareness reports that, in 2013, the average claimant age exceeded 50 for the first time ever. Claims for those age 50 and older, mostly driven by claimants over age 60, have been consistently increasing as a percentage of the total, reflecting the aging of America's working population. According to its report, "2014 Long Term Disability Claims Review," 59% of the new claims approved during 2013 were for individuals age 50 or older. The Council also cites an aging workforce as one of the factors most cited by reporting companies as likely to impact future claim incidence.

In an article about the report for Bloomberg News, Craig Giammona writes that "Prudential Financial Inc. (PRU) and Hartford Financial Services Group Inc. (HIG) are among insurers that have raised prices for the coverage after being caught off guard by higher-than-expected claims costs." In addition, he quotes Council President Barry Lundquist as saying: "On average, older people have higher wages and it’s harder for them to get back to work.When you think about the baby boomers and how old they are now, they have a much higher chance of becoming disabled -- maybe a four or five times higher chance in a given year than someone that’s in their twenties or thirties.…When you think about the baby boomers and how old they are now, they have a much higher chance of becoming disabled—maybe a four or five times higher chance in a given year than someone that’s in their twenties or thirties."

Sources: Council for Disability Awareness News Release (June 17, 2014); Bloomberg News "Aging Workers Push Disability Costs Higher for Insurers" (June 17, 2014)

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