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Disability Insurance Observer: Disaster

By Allison Bell

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I’ve been using Twitter to watch the people in the Philippines recovering from Haiyan and thinking that this might be a good time to beef up and emphasize disaster-related employee benefits.

Insurers would probably traditionally think of disaster recovery benefits as a property-casualty line, but it seems as if, from the perspective of an ordinary worker, disaster recovery benefits would be a good complement to a group disability plan or an employee assistance plan (EAP).

Disaster recovery help for people who are alive and well is clearly not a life insurance event or a medical insurance event.

But losing the ability to work because of a storm or an earthquake is a lot like losing the ability to work because of a broken back or a heart attack.

One challenge is that the kinds of events that trigger disaster recovery benefits could lead to many, many claims, but the same could be true for an ordinary group disability or EAP program.

A hurricane that wipes out a city could lead to large numbers of disability claims and EAP calls, for example.

I think the ideal package of disaster recovery benefits would include making satellite phones and satellite phone emergency batteries available to some of the best-plugged-in agents and brokers in a community; email-based and texting-based assistance with calling friends and relatives when phone service is spotty; any possible help with getting access to cash when ATMs are down; emergency deliveries of supplies to locations with large numbers of insureds; and maybe a kind of mass employer-employee speed dating and financing event for the people who are trying to reassemble a smashed community’s business sector.

The great thing about a benefit program like that is, most years, it probably wouldn’t be used, and the insurer could make a good profit. Maybe a program like that would make it easier for people who are normally self-sufficient to fend for themselves, even after disasters, and reduce the likelihood that they would have to rely on relief efforts organized by government agencies and nonprofit groups.

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