Media room

January 27, 2005

New Product Changes Disability Protection

Unique "Serious Disability" plan from Assurant Employee Benefits provides innovative, affordable coverage for serious conditions

KANSAS CITY, Mo. – A revolutionary new disability insurance product from Assurant Employee Benefits can provide a high level of income protection at an affordable price by focusing on the claimant's condition rather than on occupation or earnings capability.

The groundbreaking Voluntary Serious Disability Benefit policy is unique in several ways, but the most innovative is its patent-pending use of objective Impairment Ratings developed and published by the American Medical Association. By using AMA Impairment Ratings, known as IRs, to define disability, the policy establishes an objective benchmark for claim qualification, a feature available from no other insurance company.

What sets the IR-based policy apart is that it provides a clear and objective way to limit claims to only the most serious conditions. As a result, the policy can offer a high level of income protection at an affordable price; requires no health questions or limitations on pre-existing conditions; provides first-day coverage (no qualifying period) and offers a two-year rate guarantee. The policy is also available to whole classes of employees who may never have had access to disability insurance before.

“Providing disability protection to groups that have generally not had access to this product category is one of the most exciting aspects of this initiative,” said Neal Lucchi, vice president of worksite marketing at Assurant Employee Benefits. “We're excited and proud to introduce a totally new concept in disability insurance. We have developed a product that is affordable without limiting duration or the income replacement ratio.”

The Voluntary Serious Disability Benefit policy is a unique blend of short-term and long-term disability coverage. The initial short-term coverage offers benefits for up to six months for claimants who are hospitalized for 72 hours or longer at the onset of their injury or illness, and are unable to do gainful work afterward. After six months, the coverage converts to the long-term IR-based definition of disability. Benefits can continue up to age 65, as long as the claimant's numerical impairment rating meets or exceeds 51 percent. (See the “Guide to AMA Impairment Ratings,” attached.)

According to a study by the Society of Actuaries, nearly one in every three Americans will be disabled for three months or longer before age 65. But fewer than 25 percent of full-time employees at smaller companies, and just 42 percent of those at larger companies, are covered for long-term disability. The purpose of the Voluntary Serious Disability Benefit policy is to fill those gaps.

Guide to AMA Impairment Ratings

Impairment ratings are consensus-derived estimates reflecting the severity of medical conditions and the degree to which they result in functional limitations. The source for these ratings is The Guides to the Evaluation of Permanent Impairment, 5 th edition, 2001, published by the American Medical Association.

Using medical records, clinical and examination results, the AMA Guides require a defined process and exact standards for determining a numerical impairment rating. The rating is determined by a “whole person impairment rating” calculation performed by a certified physician using the process defined in the AMA Guides. This structured process and its exacting standards result in a clear and objective benchmark for claim qualification.

Products and services marketed by Assurant Employee Benefits are underwritten and/or provided by Fortis Benefits Insurance Company. In New York , insurance products are underwritten by First Fortis Life Insurance Company, which is licensed in New York and has its principal place of business in Syracuse , New York.