New LTD claim approvals drop

The total number of individuals receiving group disability benefits fell 2 percent to 662,000. Total benefits payments crept up to $9.4 billion from $9.3 billion in 2011.

The number of new approved LTD claims fell 2.9 percent to 154,000. Annualized benefits payments to those new beneficiaries increased about 8 percent to $1.4 billion.

“Looking back on the economic conditions during the past five years, 67 percent of the reporting companies said the economy has moderately impacted claims, while 29 percent said the economy made little or no impact,” the CDA analysts said in a discussion of the survey results.

“Most companies expect claim trends to improve gradually,” the analysts said. “Companies are evenly split on the question of whether claim patterns will eventually return to pre-recession levels, or whether there will be a ‘new normal,’ with claims stabilizing at higher levels than existed prior to 2007.”

One challenge for LTD issuers is the low interest rate environment, and another is the difficulty of finding appropriate jobs for claimants who are trying to return to work, the analysts said.

See also:

• 5 reasons Gen Y needs your financial advice
• Disability Insurers Back Income Defense Campaign
• CDA: Disability Claim Rate Plateaus