In the United States, critical illness insurance often is seen as a product that can plug holes in health insurance, but it also can be an affordable alternative to disability insurance.

Insurers in the Netherlands are starting to combine critical illness insurance and disability insurance features in products designed to meet the needs of self-employed individuals, Sabine Fahrig said here Wednesday at the annual disability insurance conference organized by JHA, Portland, Maine. JHA is a disability insurance research, consulting and reinsurance services unit of General Re Corp., Stamford, Conn.

Fahrig is a senior underwriter in the German operations of Gen Re Life Health, a JHA sister company.

Self-employed individuals lost access to basic Dutch disability benefits in 2002, and now more than 40% of self-employed Dutch people lack income protection coverage, in part because individual disability coverage can be very expensive, Fahrig said.

Critical illness insurance policies pay a set amount of benefits when insureds suffer from serious health problems, such as strokes, heart attacks or kidney failure.

CI insurance can be an attractive alternative to disability insurance, because it is about 40% to 50% cheaper for most insureds. Moreover, writing a CI policy that covers only certain conditions, such as stroke, cancer and multiple sclerosis, is much easier than writing a disability policy that excludes coverage for conditions such as mental and nervous disorders.

One 1994 study found that holders of Dutch disability policies with health problems who bought DI policies with exclusions were more likely to file other types of claims and to develop general health problems than did other insureds, Fahrig said.