High Wire Act: New Research From The Hartford Finds Family Finances Often Hanging Without A Safety Net

HARTFORD, Conn.--(BUSINESS WIRE)--New research from The Hartford Financial Services Group, Inc., (NYSE: HIG), one of the nation’s largest diversified financial services companies, found that most Americans sometimes find themselves in a precarious financial position, without a safety net if they experience a disabling illness or injury.

A large majority of survey respondents (70 percent) reported that they are meeting their expenses with little or nothing left over after bills are paid, and an additional 8 percent said they can’t meet their household expenses. In addition, 95 percent of consumers surveyed said they would have to change their lifestyle if they lost part of their family’s income for three to six months. As a result, they find themselves in an unsettling financial predicament, and yet only about half of the respondents report having short- or long-term disability insurance to cover their needs should the unexpected occur.

“Americans are trying hard to make ends meet and are also feeling the pinch that comes with debt. The delicate budget balance they try to navigate could be upended by a misfortune, such as a disability,” said Ron Gendreau, executive vice president of The Hartford’s Group Benefits Division. “What’s more concerning is that many Americans are braving this risk without income protection at the time when they need it most.”

While one in four survey participants said they believe they are more likely to win a lottery than suffer from an injury or illness for three to six months, U.S. workers have a one-in-three chance of becoming disabled at some time during their working years, according to the U.S. Social Security Administration.

“Many people dream about a large financial windfall. The unfortunate reality is that odds are far more in favor of experiencing a disability than celebrating a lottery win,” Gendreau said.

Lack of Awareness

Many people are unaware of the looming vulnerability they face, according to The Hartford’s survey. Sixty-seven percent of survey participants pointed to accidents or injuries as the top cause of short-term disability claims, but one in four workers said they don’t have disability insurance because they are healthy and unlikely to become disabled.

“When it comes to the gamble we all make with our health, ignorance isn’t bliss, and it’s dangerous in this case. Our claims records show that illnesses and medical disorders, such as cancer and depression, not accidents, keep most employees off the job,” Gendreau said. “Our research shows that Americans are not doing all that they can to fortify their family finances.”

Low-cost Safety Net

The Hartford’s research found that the barrier to disability insurance was not access but cost. A vast majority of workers (80 percent) said they can obtain income protection through the workplace. However, 44 percent of workers surveyed said they’re having a difficult time paying for benefits.

“We understand that employees are being squeezed by rising expenses on all fronts. During tough times it’s more important than ever to have a safety net of insurance coverage to protect yourself from financial hardship,” said Gendreau. “Most people might not realize how affordable group disability coverage is. You can spend a relatively small amount – about a dollar a day or the cost of a cup of coffee – and safeguard your income for a lifetime.”

The Hartford survey also identified other hurdles to protection. One in five respondents took issue with two aspects of benefits enrollment – filling out paper forms and calculating benefits expenses.

Employees surveyed said they depend on information from their employer and insurance providers to make decisions about benefits, such as life and disability insurance. In fact, 22 percent of those who don’t have disability insurance said they didn’t have enough knowledge to make the decision to purchase the coverage.

“Knowing that consumers are relying on us, The Hartford is committed to delivering benefits enrollment materials and programs that are easy to understand and simple to use. We want to make it quick and easy for consumers to sign up for benefits that protect their families,” said Gendreau. “We have a responsibility to help employees understand insurance coverage and make the right decisions.”

For The Hartford's survey, independent market research agency Opinauri, Inc., conducted an online survey polling 971 U.S. adults, aged 18-64, in February 2008. Survey data was re-balanced to a nationally representative sample of 750 U.S. adults aged 18-64. Most survey participants were married with children, working full time and earning between $50,000 and $100,000 annually. The margin of error was +/- 3.1 percent.

About The Hartford

The Hartford, a Fortune 100 company, is one of the nation's largest diversified financial services companies, with 2007 revenues of $25.9 billion. The Hartford is a leading provider of investment products, life insurance and group benefits; automobile and homeowners products; and business property and casualty insurance. International operations are located in Japan, the United Kingdom, Canada, Brazil and Ireland. The Hartford's Internet address is www.thehartford.com.

HIG-L

Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in our Quarterly Reports on Form 10-Q, our 2007 Annual Report on Form 10-K and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.