Individual Disability Sales Were Up 11% Last Year
U.S. individual disability insurers generated strong gains in sales in 2001 and modest gains in revenue from policies already in force.
The 16 carriers that participated in a new individual disability market survey conducted by John Hewitt & Associates Inc., Portland, Maine, increased premium revenue on in-force policies only 3% in 2001, to $2.8 billion.
But sales of new individual disability policies rose 11%, to $235 million.
Premium revenue from sales of the most popular product, “non-cancelable” disability income coverage, increased 15%.
Sales of a less popular type of disability insurance, “guaranteed renewable” disability income coverage, fell 2%, to $49 million. But nine of the 13 companies in that market experienced double-digit growth in sales, JHA says.
An issuer of a guaranteed-renewable policy agrees to lock in benefits but keeps the right to increase rates for specific reasons. The issuer of a non-can policy agrees to lock in both benefits and rates.
Some insurers sold huge amounts of cheap non-can coverage to doctors and lawyers in the 1980s, then suffered in the early 1990s, when a recession and industry changes hit doctors and lawyers hard.