Most workers in the United States have little or no disability insurance coverage, according to a survey by the American Council of Life Insurers (ACLI) and the Consumer Federation of America (CFA).

The survey of 500 U.S. employees found that 40 percent of those surveyed had no coverage, and 41 percent had coverage they believed would be inadequate to cover their family's financial needs. Fifty-eight percent were covered by an employer-sponsored long-term disability (LTD) plan, and one percent had an individual disability policy. Half of the survey respondents did not know what percentage of income would be replaced by their LTD policies.

A disability lasting one year or more was deemed "very likely" by 7 percent of the employees surveyed, and "somewhat likely" by 32 percent. A 35-year-old worker has a 24 percent chance of becoming disabled for more than 90 days during his or her working life, according to the National Association of Insurance Commissioners.

LTD coverage is meant to cover expenses for an employee and his or her family if the employee is unable to work due to an illness or injury. Typically, LTD policies pay two-thirds of the employee's wage if that employee is out of work for between three and six months, and last for a specified time period (for example, three years or five years) or until the employee reaches retirement age. LTD kicks in after short term disability coverage (STD) runs out, which is typically after 90 days.

More employers are slowly signing up for group disability policies for their employees; group disability insurance sales in 2000 grew by 18 percent for LTD sales and 11 percent for STD coverage, according to John Hewitt & Associates, a Portland, Maine-based consulting firm.

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