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June 21, 2007
Guardian Examines Media's Role in Consumer Education
Research Reveals Information About Disability Insurance Lags Behind Other Personal Finance News
Tax Treatment and Importance of 401(k) Protection is Largely Absent from Disability Insurance Articles
| For media inquiries, contact:
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Stephen Gilmore
Manning Selvage & Lee
Tel: 212.468.4056
Fax: 212.468.3654
Stephen.Gilmore@mslpr.com
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| Anayo Afolabi
The Guardian Life Insurance Company of America
Tel: 212.598.8329
Fax: 212.919.2790
anayo_afolabi@glic.com
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New York, June 21, 2007 — Consumers rely heavily on the media for information they need to make financial decisions, but few personal finance articles provide key information about disability insurance according to a new research report unveiled this week by The Guardian Life Insurance Company of America (Guardian).
Many American consumers don't fully understand disability insurance, or DI. According to a recent Guardian study 76% of people say they understand their auto insurance, but only 58% say the same for their disability insurance. And nearly half (48%) of consumers don't realize that disability benefits are taxable when received from an employer-paid policy. Some 46% of respondents from a Guardian survey believe group disability requires a medical check-up before purchase. However, this is generally not true.
The Disability Insurance Media Analysis, conducted for Guardian by Cision, a leading media intelligence company, analyzed 493 articles from the top 50 daily newspapers and top personal finance, business and news magazines (by circulation), as well as leading wire services, published between January 1, 2005 and December 31, 2006.
The media analysis report reveals that, while consumers value income protection and disability insurance remains an enigma to employees, disability insurance receives very little attention in top personal finance news outlets relative to other financial products.
According to the study, just over half of the DI mentions were in the "minority" - meaning other types of insurance (e.g., auto, health, life) were featured more prominently.
"We don't expect personal finance reports to replace the role of the financial advisor, broker, HR executive and insurance carrier," said Larry Hazzard, vice president, Product and Marketing, Berkshire Life Insurance Company of America (Berkshire), a Guardian subsidiary. "The industry has to do a better job at communicating information about disability insurance. But we can't ignore the power of the media. Guardian research shows consumers are more likely to pay attention to articles in the popular press than to heed communications from their own employer's human resource department or financial advisors."
For this study, initial categorization of each news item was based on how complete the discussion of disability insurance was within the article. Articles were tagged as "Incomplete", "Good", "Better" or "Best."
The study reveals that little more than half of the cumulative audience reach between 2005 and 2006 came from articles considered to be "good." That is, they acknowledged the importance of disability insurance but did not provide details on types of policies or on tax implications as did "better" articles, which comprised one-fifth of cumulative reach.
"Best" articles were scarce with only a few examples found each year. These articles included all the characteristics of a "better" article but also discussed group and individual policies in detail, including such aspects as non-cancelable coverage, occupation-specific protection and retirement income protection.
"This media analysis report is just one part of many steps that need to be taken to close the disability insurance knowledge gap", said Barry Petruzzi, 2nd vice president, Group Life & Disability, Guardian. "It is important for the insurance industry to work with both the trade and consumer media to underscore key messages and bring attention to issues that are valuable to Americans, but largely absent from news and personal finance reports. At a time when we've had a negative full-year savings rate for two consecutive years and employees hold greater personal responsibility for their financial future an income safety net like disability insurance is more important now than ever before."
Additional findings from the report include:
 | Well over half the mentions of the articles analyzed were "passing" in nature - meaning there were only brief mentions within the context of an article. |
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| Over one-quarter of the articles featured exclusive mentions of disability insurance, yet were primarily in "incomplete" or "good" articles suggesting that articles solely about disability insurance are not offering enough information about the product. |
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The report also looked at the prevalence of 5 key disability insurance issues/messages reported by the popular press, including:
| 1. | Consumers often underestimate the need for disability insurance. (17% of articles in 2006; 14% of articles in 2005) |
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| 2. | The ability to earn an income is a worker's most important asset. (9% in 2006; 3% in 2005). |
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| 3. | Small business owners should consider disability insurance. (4% in 2006; 6% in 2005) |
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| 4. | Explanation about when benefits are taxed. (3% in 2006; 2% in 2005). |
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| 5. | Policies are available that protect 401(k) contributions in addition to income. (1% in 2006; 1% in 2005) |
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"This media analysis report revealed that there is a critical need for more information about retirement income protection," said Matthew Gottfried, director, Individual Disability Income, Berkshire. "Out of nearly 500 articles that mention disability insurance, over the course of two years, less than five discussed the importance of retirement income protection. As we shift toward a defined-contribution model for retirement Americans are at risk because they are not protecting their ability to save for retirement. If they are unable to work for a period of time due to accident or illness they may be forced to stay in the workforce longer than desired to make up for the lost savings, or worse, forced to retire without an adequate nest egg."
A Guardian study entitled Insurance & Behavior - Spotlight on IDI shows that nearly half (48%) of Americans say they would probably have to stop making contributions to their retirement account should they become disabled.
"Nearly one out of every three workers will suffer a disability lasting three months or more at some point in their career, yet our research shows that 70% of working Americans say they couldn't afford to live without their paycheck for even one month before financial struggles would start to mount," said David F. Woods, CLU, ChFC, president of the LIFE Foundation. "Whether purchased individually or through work, the right type and amount of disability insurance can protect against this scenario. The LIFE Foundation is committed to working with the media, industry organizations and insurance carriers like Guardian to spread the word about the importance of disability insurance during Disability Insurance Awareness Month every May and throughout the year."
About Guardian
Founded in 1860, The Guardian Life Insurance Company of America, New York, NY (Guardian) is one of the largest mutual life insurance companies in the United States. As of December 31, 2006, Guardian and its subsidiaries had $39.5 billion in assets (on a consolidated statutory basis). With more than 5,000 employees and 3,000 financial representatives, as well as more than 80 agencies nationwide, Guardian and its subsidiaries protect individuals, businesses, and their employees with life, disability, health, long-term care, and dental insurance products, and offer 401(k), annuities and other financial products and trust services. More information about Guardian can be obtained at: www.guardianlife.com.
About Berkshire
Berkshire Life Insurance Company of America, Pittsfield, Mass. (Berkshire), is a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, N.Y. Its key missions are to grow Guardian's disability income and long-term care lines of business and to research and develop new insurance products. More information about Berkshire can be obtained at : www.BerkshireLife.com.
About LIFE
The Life and Health Insurance Foundation for Education (LIFE) was founded in response to the public's growing need for information and education on life, health, disability and long-term care insurance. LIFE also seeks to remind people of the important role insurance professionals perform in helping families, businesses and individuals find the insurance products that best fit their needs. To learn more about these topics, please visit www.life-line.org.
About Cision AB
Cision AB is a global industry leader in business and communication intelligence. The firm provides media research, distribution, monitoring and communication evaluation, as well as target group identification and distribution of information for PR and IR purposes. Cision AB has annual revenue of SEK 1.9 billion, and has around 2,700 employees in the United States, United Kingdom, Sweden, Canada, Germany, Norway, Finland, Denmark, Portugal, Estonia, Latvia, and Lithuania.
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