Adviser Demand for New Disability Products

There appears to be strong support among the adviser community for life insurers to find a way to deliver new product solutions catering to insured lives suffering total disability on an episodic basis.

As we go to press, 82% of those voting in our latest poll support the poll statement around developing new product solutions, while the rest disagree (15%) or aren’t sure (3%). The poll itself is based around discussions which took place at the recent Zurich Sustainability Round Table.

As the sector continues to work to find a solution that will best address the surge in mental health-related claims – many such claims ultimately proving to be classified as episodic in nature – one Riskinfo reader asked this simple question:

“Is ‘episodic disability insurance’ not disability income insurance?”

This great question highlights that product structures themselves don’t necessarily need to change much, but rather that a hybrid approach may assist. For example, is there a ‘Disability Income Insurance’ type of product which can be developed to simply pay a benefit on diagnosis of the episodic disability, and where a staged benefit payment over time is based on a pre-set dollar amount rather than on the claimant’s income? Such an offer has parallels to Agreed Value IP, but we’ll leave it to the product manufacturers and actuaries to mull over whether such a hybrid offer might be commercially sustainable.

Meanwhile, another reader noted during the week that as ‘episodic’ does not mean permanent:

“Insurers should not have started accepting these claims in the first place.”

Our poll remains open for another week as the conversation continues…