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

2. Today’s Discussion Environment Disability Facts, Perceptions, Misconceptions CDA Refresher: Background, History, Overview 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? 2

3. Environment www.disabilitycanhappen.org

4. 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

5. 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? 5 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, UNUM

6. 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 6 Source: CDA’s 2007 Disability Awareness Study 80% of workers who have planned financially for disability are confident about their ability to maintain their current lifestyle if a disability strikes.

7. 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 7 Sources: JHA, National Payroll Week 2008 Getting Paid In America Survey, Social Security Administration, LIMRA

8. Disability: Facts, Perceptions, Misconceptions 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 8 Source: CDA’s 2008 Worker Disability Planning and Preparedness Study From CDA’s 2008 Worker Disability Planning and Preparedness Study:

9. “Cash is nice, but…” Employees value these benefits even more than cash. Cash Source: Sun Life Financial Voluntary Products Survey, 2009 http://www.sunliferesearch.com/ Short-Term Disability Life Insurance 12.9 Dental 22.0 401(k) 21.9 Long-Term Disability Long-Term Care Vision 14.5 9 Disability: Facts, Perceptions, Misconceptions

10. Disability Facts, Perceptions, Misconceptions www.disabilitycanhappen.org

11.  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 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 established by Disability Insurance leaders concerned about lack of public awareness and understanding --- CDA was chartered as a non-profit corporation in 2005 --- 11

12. What is The Council for Disability Awareness? 1 )the growing likelihood of disability occurring among the working population 2)the financial hardship that disability can cause wage earners and their families 3)the value of prevention, planning responsibly and being prepared in case a disability prevents one from earning a paycheck A disability insurance industry “public service” dedicated to raising public awareness about… 12

13. CDA is about: Educating, communicating and raising awareness Helping workers, employers, advisors, family members, media 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 What is The Council for Disability Awareness? 13

14. What is CDA Trying To Achieve? 1.Informs wage earners about the realities and financial consequences of becoming disabled and the need to plan accordingly 2.Gets the media’s attention about growing risks of disability 3.Encourages more advisors & employers to educate employees about disability risk management and planning 4.Establishes CDA as “ the credible resource” for information about disability awareness and preparedness 5.Institutionalizes “disability financial planning” - equal status with estate, medical, investment and retirement security planning Conduct a public awareness campaign that: 14

15. Thanks To Our Thanks To Our CDA Member Companies… 15

16. CDA Refresher: Background, History, Overview www.disabilitycanhappen.org

17. CDA Resources and Tools CDA Develops and Distributes Tools for: Employees Employers Advisors Media members 17 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.

18. Available at www.disabilitycanhappen.org: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 18 CDA Resources and Tools

19. CDA Resources and Tools (cont.) Available at www.disabilitycanhappen.org: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 19

20. 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) 20 CDA Resources and Tools (cont.)

21. What’s New? The PDQ Estimator 21 http://www.whatsmypdq.org

22. Designed to… 1. Engage 2. Educate 3. Empower 22 http://www.whatsmypdq.org

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

24. Educate: Use the PDQ estimator to raise awareness of the risk PDQ Results Page 24 http://www.whatsmypdq.org

25. Educate: Use the EIQ estimator to show how much is at risk EIQ Results Page 25 http://www.whatsmypdq.org

26. Action Plans Page Empower: Turn awareness into action by integrating other tools 26 http://www.whatsmypdq.org

27. What’s New? PDQ Advisor Toolkit - Marketing Materials Personalize the PDQ Flyer; use the PDQ Graphics 27 http://www.pdqtoolkit.org

28. PDQ Advisor Toolkit - Web Buttons ADD PDQ to Your Web Site 28 http://www.pdqtoolkit.org

29. PDQ Advisor Toolkit - Flyer 29 http://www.pdqtoolkit.org

30. CDA Tools (What’s in it for you?) www.disabilitycanhappen.org

31. CDA 2008 Disability Claim Study CDA Member Company 2008 Claim Results 2008 CDA Long Term Disability Claims Review 76% LTD & IDI market share 31

32.  154,000,000 covered workers: + 15%  7,430,000 total disabled workers: + 58% (plus 1.8 million spouses and children)  890,000 new 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. Rate of worker disability… …continues to rise at an increasing rate… SS Disability Trends: 1998 - 2008 32

33. SSDI Claim Approval Rate Declining 33 Source: www.socialsecurity.gov Percent of SSDI Claim Applications Approved 1994-2008

34. Number of SSDI Claim Applications Compared to Approvals – 1994-2009 (est.) Source: www.socialsecurity.gov 34

35. What’s New at CDA? (What’s in it for you?) www.disabilitycanhappen.org

36. What’s New? Advisor Tool Kit – New Additions Advisor Homepage 36

37. What’s New? CDA 2008 Disability Claim Study CDA Member Company 2008 Claim Results:  156,000 new LTD/DI claims approved in 2008  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 37

38. 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! 38

39. What’s New? Media Outreach: CDA in the News 39

40. Monica’s Story www.disabilitycanhappen.org

41. 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… 41

42. Monica’s Story 42 My Boy’s Haven

43. 43 A Canadian’s Dream Abode Monica’s Story

44. 44 Our Prime Minister’s Manor Monica’s Story

45. 45 California Dreamin’ Monica’s Story

46. 46 The Million Dollar Bracelet Monica’s Story

47. 47 Humpty Dumpty Falls Monica’s Story

48. 48 Think Safety First Monica’s Story

49. 49 Life Happens Monica’s Story

50. 50 The Penthouse Suite Monica’s Story

51. 51 The Outhouse Monica’s Story

52. 52 Jolly’s Follies Monica’s Story

53. 53 Mr. George Monica’s Story

54. 54 Casa Georgie Monica’s Story

55. 55 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 Monica’s Story

56. 56 Reasons to Invest in and Recommend Disability Insurance: For your children, spouse, friends, family and parents Consider ‘Disability Insurance’ as ‘Living Insurance’ Do not risk having shelter, food, clothes, medical care, independence Plan that a disability could be a long-term or lifetime high risk exposure Share a ‘dramatic’ disability story to encourage planning; being unprepared and becoming disabled is a ‘traumatic’ experience for all Become a hero in someone’s life story Monica’s Story

57. Call to Action: How can you help? www.disabilitycanhappen.org

58. As CDA Succeeds in Raising Disability Awareness… Risk of “losing your ability to earn a living” is elevated to a most important risk to protect Wage earners will be prepared to understand & manage all the financial risks associated with disability Benefits decision makers (advisors, employers, employees) will be better equipped to make best choices and recommendations Disability Planning will be an essential to every financial plan “We” will deliver real value to the market place by creating more personal financial security 58

59. Call to Action: …What Can YOU Do To Help? Visit and use the CDA website Use CDA tools, data and information – and recommend them to others Discuss CDA: on Social Networking sites, in DI Forums, study groups, etc. Tell us what you need to inform and educate wage earners, employers and others – we will deliver! If your company(ies) are already supporting CDA – please tell them THANK YOU… and to keep doing it! If your company(ies) are not already supporting CDA – please tell them they must… we need all companies to join! 59

60. The Council For Disability Awareness… …a Rising Tide Lifts All Boats! Thank You! www.disabilitycanhappen.org Barry Lundquist, CLU The Council For Disability Awareness 75 Pearl Street, Suite 205 Portland, ME 04101 207-774-2634