Some disability insurers are borrowing an idea from long term care insurers and using ratings of general inability to function, rather than inability to hold a job, as the benefits triggers.

The products may not provide much, if any, protection against the many cases of disability resulting from “subjective” conditions, such as severe chronic pain. But marketers say the products could appeal to consumers who want relatively inexpensive protection against the most obvious, most severe types of disability.

Typically, when a determination system uses a measure such as an impairment rating, “there is no disputing the diagnosis,” says Joe Sevcik, a senior vice president at Assurant Employee Benefits, Kansas City, Mo., a unit of Assurant Inc., New York.

Use of impairment ratings, rather than occupational assessments, “places the focus on the actual sickness or injury, rather than a person’s occupation, other types of work that could be done, or how much money a person can or cannot earn,” Assurant Employee Benefits tells prospective customers in a brochure describing the company’s Voluntary Serious Disability Benefit product.

Long term care insurers are major users of triggers based on one common measure of impairment, inability to perform the basic activities of daily living–bathing, dressing and undressing, eating, transferring from bed to chair, controlling urination and bowel movements, using the toilet, and walking.

The underwriting risks facing sellers of catastrophic disability products may be similar to the risks facing insurers that cover active employees enrolled in employer-sponsored LTC programs.

When the American Association for Long-Term Care Insurance, Westlake Village, Calif., conducted an LTC benefits payment survey, it found that 11.5% of the new LTC insurance claims filed in 2007 were filed for insureds age 50 to 69.

Insurers that offer disability catastrophic riders or stand-alone cat disability products, may use ADL benefits triggers, and supplement the ADL triggers with a cognitive impairment trigger and terminal illness triggers.

Some of the insurers that offer individual or group disability cat riders include Guardian Life Insurance Company of America, New York; Unimerica Insurance Company, a unit of UnitedHealth Group Inc., Minnetonka, Minn.; and Standard Insurance Company, a unit of StanCorp Group Inc., Portland, Ore.

Mutual of Omaha Insurance Company, Omaha, Neb., says that it offers employers the option of using ADLs, rather than a regular occupation definition, in the definition of disability for basic disability insurance coverage.

Like Mutual of Omaha disability products that incorporate ADL triggers, Assurant Employee Benefits’ Voluntary Serious Disability Benefit, introduced in 2005, provides basic disability coverage, rather than supplementing another, conventional disability policy.

The policy can replace up to 80% of an insured’s income, with a monthly benefit of $500 to $5,000. Insureds qualify for short-term disability benefits after being in the hospital for 3 days.

To determine whether insureds are eligible for long-term disability insurance benefits, Assurant Employee Benefits has physicians calculate “whole person impairment” ratings based on a rating system developed by the American Medical Association, Chicago.

The AMA rating system includes ADL indicators and factors such as evidence that chronic conditions have caused severe organ damage.

The serious disability product also provides benefits for terminally ill insureds.

“We had some really good early success with groups,” Sevcik says. “Momentum has continued.”

Early claims experience was somewhat higher than expected. Assurant Employee Benefits responded by increasing the required whole person impairment level to 75%, from 51%. An insured with a 75% level would have little or no ability to work, Sevcik says.