We all have dreams and aspirations and work hard to create a secure, happy lifestyle for ourselves and our families. However, all this depends on our incomes.
This is why we believe all life insurance products should protect your client’s ability to earn an income – whether the risk is temporary disability, long-term disability or even death. It is also why we believe every working adult needs income protection as the foundation for every life insurance plan.
A new approach to the problem
However, income protection products often have restrictive entry requirements which inevitably exclude a large part of the market.
At FMI we have identified more than 250 occupations that could not qualify for income protection (for example pilots, oil rig workers, sportspeople, musicians and students) and set out to develop a solution. Our thinking was that we could solve the problem by approaching it from a different angle. Rather than producing a product that defines cover broadly and then excludes all sorts of circumstances, we set out to specify exactly what is included – we call this Event Based cover.
We analysed every single income protection claim we have paid over the past 20 years and uncovered 197 defined events that account for more than 80% of claims received. What’s more is that we identified how long each event typically lasted, and that allowed us to also set an appropriate payment period for each defined event.
To add further certainty we have developed a functional impairment solution – to catch claims not on the list of 197 events and those that may continue beyond the guaranteed payment period. In a market first, this new functional impairment criteria does not require a condition to be permanent or for a claimant to have reached maximum medical improvement to qualify for a claim. As a real safety net, this new functional impairment solution pays for as long as the condition exists, whether temporary or permanent.
This fresh and innovative approach means that temporary and long-term disability benefits are now available for the first time to more than 250 occupations.
What is Event Based cover?
Event Based disability cover offers the following:
1. 197 defined events which qualify for a guaranteed claim – speedy payments with no waiting periods
• Each event also has a guaranteed payment period which means clients know exactly how long they will be paid for; and
• Claims are based on the occurrence of an event so there is no need to prove that a client cannot work.
2. Functional Impairment cover – with a temporary definition.
A new benchmark for claims certainty
We have also extended this claims certainty to our entire product range adding all 197 Defined Events to our temporary income protection benefits under the Fast Track criteria.
This means that in at least four out of every five income protection claims;
• Claims will initially be paid based on the occurrence of the defined event – with guaranteed payment and no need to prove a client cannot work this results in claims certainty and immediate payment; and
• At the end of each minimum guaranteed payment period, traditional occupational disability criteria will be applied to make sure there is comprehensive cover.
Just the beginning
FMI’s Defined Event Criterion offers policyholders real claims certainty and a dramatically improved claims experience, which will have a significant impact on the way income protection policies work in future.
There is a brand new market for income protection and we are extremely excited about the future of Event Based cover. Our goal remains to be able to offer income protection to every person who earns an income and this new product is a major step forward towards that goal.
Get the latest issue of FAnews