Industry review finds steady rise in LTD claims

In its seventh annual Long Term Disability Claims Review, the Council for Disability Awareness reports that more than 662,000 people received about $9.3 billion in long term disability insurance payments from CDA member companies during 2011.

The number of long term disability claims has increased industrywide each of the past four years. This year’s results represent a 2 percent increase in payments and a 1 percent increase in the number of people receiving those payments over 2012, according to the study.

Seventeen CDA member companies representing more than 75 percent of the commercial disability insurance market contributed disability claim data for this year’s survey. Though long term disability claims were up overall, claims incidence results were mixed at individual companies across the industry. Incidence refers to the number of claims per 1,000 insured lives per year. The report found:

• 43 percent of participating companies reported increased claim incidence from 2010 to 2011
• 38 percent reported incidence as flat from 2010 
• 19 percent reported lowered incidence
• In 2010, 56 percent of participating companies reported increased claim incidence

“Similar to the majority of respondents to the survey, we have seen a slight increase in the incidence of long term disability claims at Unum over the past few years,” said Kevin Huber, assistant vice president of Benefit Metrics and Analysis. “This has been driven to some degree by aging of our insured block and the economic environment.”

According to the CDA report, most, but not all, companies participating in the survey cite the economic environment as a factor in increased claims incidence. Participating companies reported insured lives declined by 0.5 percent from 2010 to 2011, reflecting the third straight year that the number of wage earners insured for long term disability has declined. The number of employees insured in employer sponsored plans has declined each year since 2008.

Since 2005, the CDA has conducted the annual review of long term disability claims among the U.S. working population. The review summarizes long term disability insurance claims data gathered from the annual CDA member Long Term Disability Claims Survey.

Unum is a founding member of the CDA, a non-profit group governed by 18 leading disability insurance companies. David Leopold, senior vice president and chief marketing officer for Unum US, is a member of the council’s board of directors.

Based in Portland, Maine, the CDA is dedicated to raising awareness of the challenges of disability and providing education about disability insurance protection.

Read the full claims report here.