Disability benefits in conjunction with life assurance policies

Abstract

Disability Insurance is a subject which has at various times found a place in the proceedings of the Faculty and Institute of Actuaries, but only on rare occasions at our own proceedings. The present paper does not present anything new on the subject but has been written with the object of providing an opportunity of considering and discussing a form of insurance which, in some form or other, is transacted by most Life Offices in this country. Most Life Offices will only issue a somewhat mild form of the insurance, that is, the Waiver of Premium benefit, but even if we are not usually concerned with more than this form of the insurance, it is felt that a discussion of the principles involved would be of value.Considering the number of eminent actuaries who have, at various times, stated that they would like to see an extension of the writing of Disability Insurance, it is somewhat surprising that more of the business has not been written in this country. The reasons for the neglect are not far to seek. First, there are very real administrative difficulties involved including the difficulty of obtaining suitable statistics on the subject. A large part of the present paper is taken up with a discussion of these difficulties. Secondly, there is the unfortunate experience of our American colleagues who have in the past lost considerable sums of money in their Disability Accounts. This experience has led a large number of American Offices to cease to transact the more liberal forms of benefit.