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Disability Insurance Observer: Lump Sum

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Disability insurers have been pretty quiet for awhile but are starting to promote their services more as they get closer to the latest annual Disability Insurance Awareness Month campaign.

The campaign, which takes place in May, reminds consumers, and employers, that disabilities that interfere with workers’ ability to work are relatively common.

Guardian Life Insurance Company of America, New York, is talking about the idea of building on income protection by adding retirement asset protection.

Consumers could protect themselves against the risk that even a temporary disability will affect total earnings and total retirement savings by paying extra for a rider that will pay a lump sum when the insured retires, Guardian says.

One advantage of the lump-sum-payment-at-retirement approach is that it gives working-age insureds who are tired of their careers and want to go fishing no immediate financial help with spending their days fishing.

Unum Group Corp., Chattanooga, Tenn. (NYSE:UNM), is offering products that build on its expertise with serious illness and can help employers and employees cope with gaps in major medical coverage.

Unum is emphasizing critical illness insurance and group accident coverage.

Those products offer lump-sum protection against rare, catastrophic health problems and against injuries that may strike people who do their best to take care of themselves as often as against couch potatoes.

Because those products pay out lump-sum benefits, not the many years of highly interest-rate-sensitive benefits a long-term disability insurance policy would pay out, the products are also less vulnerable to Federal Reserve Bank efforts to jolt the economy to life with ultra-low interest rates.


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