Barry Lundquist, CLU President The Council for Disability Awareness disabilitycanhappen

1. The Council for Disability Awareness“The Risk and Consequence of Disability: Awareness, Need, Planning, Responsibility and Opportunity” Twin Cities DI Day October 22, 2009 Barry Lundquist, CLU President The Council for Disability Awareness www.disabilitycanhappen.org “Raising Public Awareness About Disability”

2. Today’s Discussion • Environment • Disability Facts, Perceptions, Misconceptions • CDA Refresher: Background, History, Overview • Other CDA tools (What’s in it for you?) • What’s New at CDA? (What’s in it for you?) • Monica’s Story • Call to Action: How can YOU help?

3. The Disability Insurance Environment… …is Evolving…Lots going on: • Health care costs…Health care debate • Shift to consumer driven benefits • Decision making shifting • Costs shifting • Demographics • Increasing incidence of disability • Depleted Savings and Retirement accounts • Workers embracing security • Can Government fulfill its promises? • Let alone take on more

4. Disability: Facts, Perceptions, Misconceptions • 54.4 million Americans reported some level of disability in 2005; roughly 1 of every 5 • Three out of 10 workers between 25 and 65 will experience a Disability of 3 months or longer • One in 7 workers will be disabled for five years or more before retirement • The average long-term disability absence lasts 2.5 years • The chances of a 32 year old becoming disabled prior to retirement are 3.45 times greater than the chance of dying. • Over 80% of physicians have disability insurance protection; what do they know that others don’t? Sources: U.S. Census Bureau, Commissioners Disability Table, 1998; Commissioners Individual Table A; Journal of the American Society of Chartered Life Underwriters; Social Security Administration Fact Sheet January 2007

5. Disability: Facts, Perceptions, Misconceptions From CDA’s 2007 Disability Awareness Study: • 90% of workers grossly underestimate chances of becoming disabled & potential length of disability • 85% express little/no concern about becoming disabled • 64% unaware of disability impact on 401(k) contributions • Women are more aware of the risks, but less prepared than men • 80% of workers who have planned financially for disability are confident about their ability to maintain their current lifestyle if a disability strikes. Source: CDA’s 2007 Disability Awareness Study

6. Disability: Facts, Perceptions, Misconceptions • 58% of adults say that they are covered by disability insurance; only around 35% actually are covered • 71% of workers say it would be very or somewhat difficult to meet their financial obligations if next paycheck were delayed for one week • 70% of the private sector workforce has no long-term disability insurance • 66% of agents say because clients don’t ask = why they don’t sell disability insurance Sources: JHA, National Payroll Week 2008 Getting Paid In America Survey, Social Security Administration, LIMRA

7. Disability: Facts, Perceptions, Misconceptions From CDA’s 2008 Worker Disability Planning and Preparedness Study: • 53%: ability to earn a living is most important contributor to financial security • 86%: say workers should plan in their 20s and 30s for income limiting disability • 82%: express concern about how they would pay bills if disabled • 62%: don’t mention earnings as part of financial planning • 54%: never discussed disability planning, how they would pay bills, etc. • 57% have not discussed how to manage loss of income and have no plan Source: CDA’s 2008 Worker Disability Planning and Preparedness Study

8. Disability: Facts, Perceptions, Misconceptions “Cash is nice, but…”Employees value these benefits even more than cash. Dental22.0 Long-Term Care Cash Short-Term Disability Long-Term Disability Vision14.5 401(k)21.9 Life Insurance12.9 Source: Sun Life Financial Voluntary Products Survey, 2009 http://www.sunliferesearch.com/

9. CDA was established by Disability Insurance leaders concerned about lack of public awareness and understanding • Disability - a neglected risk… …overshadowed by health, longevity, pre-mature death risks • Lack of public awareness & dialogue about disability… …trends, financial impact, resources, healthy lifestyles • Slow response to a new era of personal responsibility… ...workers are increasingly in the risk the business …trend toward consumer driven benefits…choice and cost …most not adequately informed or preparing • The need for a credible information resource… …help the public understand disability risks and consequences and and the value of prevention, planning and protection --- CDA was chartered as a non-profit corporation in 2005 ---

10. What is The Council for Disability Awareness? 1) the growing likelihood of disabilityoccurring among the working population 2) the financial hardshipthat disability can cause wage earners and their families 3) the value of prevention and being prepared and planning responsiblyin case a disability prevents one from earning a paycheck • A disability insurance industry “public service” dedicated to raising public awareness about…

11. What is The Council for Disability Awareness? • CDA is about: • Educating, communicating and raising awareness • Helping workers, employers, advisors, family members, media members and any interested others understand the risk and impact of disability • Helping workers avoid disability where possible • Helping workers plan appropriately for the possibility of an income limiting disability • CDA is not about: • Selling • Product • Lobbying A rising tide lifts all boats… …John F. Kennedy

12. What is CDA Trying To Achieve? Conduct a public awareness campaign that: • Informs wage earners about the realities and financial consequences of becoming disabled and the need to plan accordingly • Gets the media’s attention about growing risks of disability • Encourages more advisors & employers to educate employees about disability risk management and planning • Establishes CDA as “ the credible resource” for information about disability awareness and preparedness • Institutionalizes “disability financial planning” - equal status with estate, medical, investment and retirement security planning

13. Thanks To Our CDA Member Companies…

14. CDA Resources and Tools • CDA Develops and Distributes Tools for: • Employees • Employers • Advisors CDA is looking to carry out its mission of raising disability awareness among working Americans by communicating directly with workers, but also by leveraging channels such as advisors, employers, the media, and insurance companies.

15. Other CDA Resources and Tools Available at www.disabilitycanhappen.org: • Disability Facts and Statistics • 5 Questions Every Worker Should Ask • Disability Awareness “Quick Quiz” • Disability Planner • Financial Security Plan • Income Replacement Benefits Inventory • Healthy Lifestyle Tips

16. CDA Resources and Tools (cont.) Available at www.disabilitycanhappen.org: • Disability Studies and Surveys • Long Term Disability Claim Studies: 2005, 2006, 2007, 2008 • Worker Disability – A Growing Risk to Retirement Security • 2008 Worker Disability Planning and Preparedness Study • 2007 Disability Awareness Study • Real Life Stories

17. CDA Resources and Tools (cont.) What’s new at CDA? • PDQ – Personal Disability Quotient (March 2009) • Advisor Tool Kit (July 2009) • 2008 Disability Claim Study (September 2009) • CDA in the News (Ongoing)

18. What’s New? The PDQ Estimator http://www.whatsmypdq.org/

19. Designed to… 1. Engage 2. Educate 3. Empower http://www.whatsmypdq.org/

20. Engage: Turn them on by leading in with a different question http://www.whatsmypdq.org/

21. Educate: Use the PDQ estimator to raise awareness of the risk PDQ Results Page http://www.whatsmypdq.org/

22. Educate:Use the EIQ estimator to show how much is at risk EIQ Results Page http://www.whatsmypdq.org/

23. Empower: Turn awareness into action by integrating other tools Action Plans Page http://www.whatsmypdq.org/

24. What’s New? Advisor Tool Kit – New Additions Advisor Toolkit Screen Shot www.disabilitycanhappen.org

25. Advisor Toolkit - PDQ Marketing Materials Personalize the PDQ Flyer; use the PDQ Graphics www.disabilitycanhappen.org

26. Advisor Toolkit - PDQ Web Buttons ADD PDQ to Your Web Site www.disabilitycanhappen.org

27. Advisor Toolkit - PDQ Flyer www.disabilitycanhappen.org

28. What’s New? CDA 2008 Disability Claim Study CDA Member Company 2008 Claim Results: • 156,000 new LTD/DI claims approved in 2007 • 574,000 existing LTD/DI claimants • $7.9 Billion in paid claims (7% increase) 2008 CDA Long Term Disability Claims Review 76% LTD & IDI market share

29. CDA 2008 Disability Claim Study CDA Member Company 2008 Claim Results 2008 CDA Long Term Disability Claims Review 76% LTD & IDI market share

30. Rate of worker disability… …continues to rise at an increasing rate… SS Disability Trends: 1998 - 2008 • 154,000,000 covered workers: + 15% • 7,430,000total disabled workers: + 58% (plus 1.8 million spouses and children) • 890,000new disabled workers in 2008: + 46% • 2,320,000 applications: + 98% • 38.4% approval rate in 2008 • Average current backlog: 17 months • Average age: 51 • Average monthly benefit: $1064 • 37% increase in rate of disability – 50% increase for female workers Source: SSA 2007/8 Annual Statistical Supplement.

31. SSDI Claim Approval Rate Declining Percent of SSDI Claim Applications Approved 1994-2008

32. Number of SSDI Claim Applications Compared to Approvals – 1994-2009 (est.) Source: www.socialsecurity.gov

33. Advisor Toolkit – Graphs and Charts Library Graphs and Charts from the 2008 Claim Study have been added to the toolkit. Visitors may download the Graphs and Charts and add them to presentations and marketing materials. More to follow! www.disabilitycanhappen.org

34. What’s New?Media Outreach: CDA in the News

35. Monica’s Story Monica had it all by the age of 37 - a successful career in the financial field, a wonderful son, and big dreams for the future. She never dreamt that a disability would change her life forever…….

36. Monica’s Story My Boy’s Haven

37. Monica’s Story A Canadian’s Dream Abode

38. Monica’s Story Our Prime Minister’s Manor

39. Monica’s Story California Dreamin’

40. Monica’s Story The Million Dollar Bracelet

41. Monica’s Story Humpty Dumpty Falls

42. Monica’s Story Think Safety First

43. Monica’s Story Life Happens

44. Monica’s Story The Penthouse Suite

45. Monica’s Story The Outhouse

46. Monica’s Story Jolly’s Follies

47. Monica’s Story Mr. George

48. Monica’s Story Casa Georgie

49. Monica’s Story HUMPTY DUMPTY THE BLONDE • Humpty Dumpty had a slip and fall and all the king’s horses and the king’s greatest men continually attempted to piece Humpty back together again. • They tried and they tried with all of their might and always put up such a valiant fight. • To mend the young broken egg who crumbled like a shell, to piece back together the egg to make whole. • We honor and cherish your gallant efforts to achieve a life again given to the woman in such dire need. • By: Monica Soltes, April 2005

50. Monica’s Story