Today’s young and mid-career professionals readily assume that their working lives will be far less predictable than their parents’ career paths, but continue to place a high value on their ability to obtain insurance coverage through their various employment situations, according to consumer research commissioned by The Guardian Life Insurance Company of America (Guardian).
While their Baby Boomer elders may have aspired to achieve upward mobility by spending much or even all of their working years being promoted up the corporate ladder at a single employer, Gen X
(age 30-45) and adult Gen Y
(age 18-29) generation members expect a lifetime of significant career events: not just changing employers but branching into entirely new careers, even starting their own businesses along the way.
This expectation is more pronounced among younger workers, Guardian’s survey found, with Gen Y respondents foreseeing an average of 8.3 significant career events, compared to 5.5 such changes expected for members of Gen X.
While some of these significant career changes may be unplanned – 20% of Gen X respondents cited “layoffs/downsizing” as the most likely reason and 27% of Gen Y specified a “change in family situation” – the most common driver for both cohorts (39%) was “want to earn more money,” which far outstripped their desire “to live in a different place” or as an antidote to being “bored with current job” (less than 10%).
“These results show that younger workers clearly value their ability to earn an income, and that it will be the dominant factor behind each significant event of their very busy professional lives,” said Lawrence Hazzard, Vice President of Product Strategy for Berkshire Life Insurance Company of America, the Guardian company that issues individual disability income insurance to employee groups through its DI@WorkÔ supplemental DI program.
Gen X, Y Agree on Importance of Income Protection
Guardian’s survey also sought to learn about the types of insurance that are most meaningful to workers at different points in their lives. Generational differences were striking when it came to certain kinds of coverage. For example, Gen X respondents were significantly more likely to consider auto (51%) and homeowners (41%) insurance to be “extremely important” versus their younger counterparts (just 37% and 25%, respectively), reflecting the greater likelihood of employees in their 30s and early 40s to own cars or homes than twenty-somethings just out of school.
Conversely, Gen Y – the first truly digital generation – held significantly greater stock in having identity theft insurance (29% feel it’s “extremely important”) than their older Gen X siblings (just 16%). This opinion gap more than doubled when responses were expanded to “extremely/very important” – 77% for Gen Y versus 49% for Gen X.
However, both generations placed a similar amount of importance on having a retirement savings plan, as well as life, long term care and disability income insurance. Indeed, when it came to disability income insurance – which provides a benefit when employees are injured or too sick to work – Gen X and Gen Y respondents were the most closely aligned, with a difference of just three percentage points in deeming it “extremely important” (31% and 28%, respectively).
What’s more, more than half of respondents in both cohorts (51% of Gen X and 55% of Gen Y) reported they’d be interested in continuing their disability income insurance if they changed employers, something with which Guardian hopes its industry-unique portability option will resonate.
“When we were building the latest version of our supplemental DI offering, we saw an opportunity in the marketplace to make something available to employees who changed employers,” Hazzard observed. “This research confirms that this generation of mobile workers wants to protect their most important asset – their ability to earn an income – even when they leave for greater opportunity someplace else.”
Keeping Pace With Salary Increases
In many ways, supplemental DI combines the best of group and individual DI insurance coverage. Because it’s offered through an employer as a voluntary benefit, employees can take advantage of discounted group rates and limited medical underwriting (also known as Guaranteed Standard Issue, or GSI). Because the policies are individually owned and portable, employees can take them to their next jobs.
With its 2011 Income ProVider upgrade, Guardian has taken these advantages up a notch by introducing a Portable GSI feature – embedded right into the contract – that gives the employee a one-time opportunity to increase his or her coverage up to the plan’s maximum GSI offer, even if he or she is switching employers.
“Normally, if you leave the employer who offered you the original supplemental DI plan, you lose any unused GSI,” Hazzard explained. “With Income ProVider, employees can continue to protect their income even when changing employers – a time when most people see a significant increase in compensation. There’s also no lengthy application process and no additional medical underwriting required. No one else in the industry does this. Guardian is truly in tune with the priorities of today’s young and mid-career professionals.”
In addition to its Portable GSI feature, Income ProVider offers a variety of other advantages, including flexible plan options that can be tailored to meet different income protection needs, a built-in “return to work” incentive benefit to help employees with a partial disability recover financially and the DI@WorkÔ state-of-the-art online enrollment system, which is built for ease of use: Employees can even enroll through an iPad.
This latest Guardian supplemental DI upgrade comes at a time when most U.S. workers seem to understand that anyone can become disabled, but few seem to know just how common disability is. According to a survey
of 1,006 full-time employees conducted by the Council for Disability Awareness
(CDA), about 83% agree that “disability can happen to anyone at any time,” but 31% estimated that the average worker only has a 1 in 100 chance of becoming disabled. A total of 91% said that odds are 1 in 10 or lower.
In reality, the odds that today’s young workers will experience a long-term disability before the anticipated retirement age are 1 in 3, according to the CDA.
Guardian’s Hazzard - who chairs the CDA’s research committee and is the parent of two Gen Y college graduates - believes that young professionals, with their circuitous career paths, are most vulnerable to income disruption due to illness or injury.
“This generation is refreshingly realistic about the fact that they’ll likely need to change jobs often to succeed,” he said. “Guardian’s research shows that they also feel strongly about the financial value of their work and have a desire to protect that asset throughout their working lives. Supplemental DI programs like DI@Workä enable employees to get individual, portable coverage. Now, with our Portable GSI enhancement, they won’t be punished for switching employers; they’ll be able to get an appropriate level of income protection to secure their financial futures.”
To learn more about how DI@Workä can offer organizations more flexibility and their employees more value, benefits managers and producers should call the toll-free DI@Workä information line at 866-590-8847.
About the Survey
The Opinion Research Corporation
of Princeton, New Jersey, conducted this omnibus consumer survey for Guardian. The survey sample consisted of 2,020 individuals – 1,004 men and 1,116 women – at least 18 years of age and living in private households in the continental U.S. They were interviewed by telephone from January 6 to 10, 2011. The margin of error was plus or minus two percentage points at the 95% confidence level.
For Media Inquiries, Contact:
Wendy Webster Coakley
The Guardian Life Insurance Company of America
A mutual insurer founded in 1860, The Guardian Life Insurance Company of America (Guardian) and its subsidiaries are committed to protecting individuals, business owners and their employees with life, long term care insurance, disability income and dental insurance products, and offer 401(k), annuities and other financial products. Guardian operates one of the largest dental networks in the United States, and protects more than six million employees and their families at 120,000 companies. The company has more than 5,400 employees in the United States and a network of over 3,000 financial representatives in more than 80 agencies nationwide.