The Top 5 Disability Insurance Trends to Watch for in 2023

James Crook
top 5 disability insurance trends in 2023

As an insurance advisor, you must anticipate your clients’ risks and spot solutions. An important part of this is staying current on disability insurance trends and innovations. In the ever-changing world of disability insurance, this can be a challenge.

But by understanding the top 5 disability insurance trends of 2023, you’ll be able to protect your clients and outpace your competition. Here are several trends to monitor:

  1. Increasing prevalence of chronic conditions
  2. Aging workforce
  3. Rising healthcare costs
  4. Increasing frequency of mental health conditions
  5. Increasing use of technology

Prevalence of Chronic Conditions

According to the Centers for Disease Control and Prevention (CDC), the percentage of US adults with multiple chronic health conditions increased from 21.8% in 2001 to 27.2% in 2018.

Chronic conditions are those that last for more than three months and cannot be cured. They include heart disease, stroke, cancer, diabetes, and arthritis.

The COVID-19 pandemic appears to have exacerbated these issues.  And the emergence of long-haul COVID adds to this as well. For example, a recent survey by the Urban Institute found that a quarter of nonelderly adults reported delaying or forgoing care in the past 12 months over the fear of exposure to COVID-19.

The survey also found that adults with chronic health conditions were more likely to report forgoing or delaying care in the past 30 days than those without a chronic disease. People with diabetes, for example, are especially at risk.

“Many of the conditions and issues that need to be addressed with diabetes have been delayed for a really long time.  That’s a significant factor that, unfortunately, we’ll continue to see the implications of over time,” Dr. Robert Gabbay, chief scientific and medical officer for the American Diabetes Association, said.

As the prevalence of chronic conditions increases, so does the need for disability insurance. That’s because people with chronic conditions are more likely to face a disability that prevents them from working.

As chronic conditions become more widespread, disability insurance claims may also become more frequent. 

Aging Workforce

As the Baby Boomer generation ages, the workforce is aging as well. According to the US Bureau of Labor Statistics, the number of workers aged 55 and over is expected to increase from 23.1% to 25.2%.  This trend has several implications for disability insurance.

First, as people age, they become more likely to experience a disability. According to the CDC, disability affects 2 in 5 adults age 65 and older.

Second, the aging workforce will likely have more chronic conditions than previous generations. As mentioned before, chronic conditions are a major cause of disability.

Third, the aging workforce is likely to experience more mental health issues. The CDC further estimates that 20% of people aged 55 years or older will experience mental health concerns.

The combination of an aging workforce and an increased prevalence of chronic conditions and mental health issues will likely lead to more disability claims.

Physicians, dentists, and other healthcare professionals with specialized incomes are particularly exposed.

Rising Health Care Costs

Healthcare costs have been rising for years, and there is no sign that this trend will stop soon.  In fact, healthcare spending in the US is expected to reach $6.2 trillion by 2028, according to the Centers for Medicare and Medicaid Services (CMS).

Healthcare professionals often charge more for their services when the cost of providing those services goes up. These higher charges are then passed on to insurance companies, who raise the rates they charge their customers in turn. Employers are forced to pay more for health insurance, so they often cut back on ancillary coverages, including disability insurance.

Although this macroeconomic pressure may seem disheartening, smart insurance advisors can use this disability insurance trend to stress the importance of disability insurance. According to the U.S. Bureau of Labor Statistics (BLS), consumer prices rose 9.1% year over year in June 2022. As prices increase, workers need their income protected now more than ever before.

Employers can use a quality long-term disability (LTD) insurance policy as a recruitment and retention tool.  By adopting a strong LTD policy, employers demonstrate their commitment to safeguarding employees and their families. It also sends the message that the company cares about its employees’ well-being and will invest in their future. This can be a powerful recruiting tool, as potential employees will see that the company will go above and beyond to take care of its employees. It can also help keep employees from leaving the company, as they will know they will be taken care of if something happens.

Increasing frequency of mental health conditions

Mental health conditions are becoming increasingly prevalent in the US. 1 in 5 adults in the US experiences mental illness in any given year, according to the National Institute of Mental Health. This means that nearly 44 million Americans suffer from mental illness each year. Mental health conditions can significantly affect an individual’s ability to work. Depression is a leading cause of disability worldwide and a major contributor to the overall global burden of disease.

Healthcare professionals are one segment of the workforce particularly at risk for mental health-related disability. A study by the American Medical Association (AMA) found that nearly 1 in 3 physicians experience symptoms of burnout. These symptoms can include feelings of depression, anxiety, and hopelessness. When left untreated, burnout can lead to more serious mental health conditions, such as clinical depression.

With the rising prevalence of mental health conditions, it is more important than ever for healthcare professionals to have a long-term disability insurance policy that covers mental and nervous and drug and alcohol (MNDA)-related conditions correctly. Therefore, group LTD contracts designed for healthcare professionals should include a per-occurrence MNDA provision. With a per-occurrence provision, if an insured suffers from an MNDA disability, fully recovers, but then relapses six months after the recovery date, they will be eligible for another 24 months of MNDA benefits.

Increasing use of technology

As the insurance industry evolves, insurance advisors must adapt to a rapidly changing market that demands technological proficiency. One of the most critical new technologies for insurance advisors is enrollment technology. This technology can help insurance advisors streamline the enrollment process for their clients, making it faster and easier for them to get coverage.

In addition, enrollment technology can also help insurance advisors manage their clients’ data allowing them to understand their needs better and to tailor their coverage. As enrollment technology becomes more widely adopted, insurance advisors able to use it effectively will have a significant advantage.

The disability insurance landscape is constantly changing, and staying up-to-date on the latest trends can be tough. But by being aware of the top 5 trends for 2023, you’ll be able to give your clients the best possible coverage – and stay one step ahead of your competition.



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