By Cyril Tuohy
MassMutual has tweaked the rate structure of its Radius disability income product line and has added the option of buying life insurance without the need for medical tests, the company announced.
The changes are designed to make disability income protection more affordable for entry-level wage earners and will appeal most to African-Americans who, as a group, are at higher risk than the general population of becoming disabled, Mass Mutual also said.
“Providing the option to lock in insurability at a young age alongside disability income insurance protection is a natural pairing for a strong financial foundation,” Mike Fanning, executive vice president of the U.S. Insurance Group for MassMutual, said in a news release.
Approximately one in five new long-term disability claims in the U.S. are filed by people under the age of 40, according to the 2013 Council for Disability Awareness Long Term Disability Claims Review.
Under the company’s graded premium option, policyholders can opt to pay less than the traditional or fixed level premiums during the early years of the policy. Premiums gradually rise before leveling off at age 50, MassMutual said.
The second product tweak allows policyholders to buy additional $25,000 increments of life insurance every three years until the age of 46 without undergoing a medical exam, the company said.
In addition, MassMutual announced two riders to the Radius policy giving policyholders the option to increase insurance payouts for people who can’t go back to work full time, and to provide policyholders the option to increase their income protection in the future.
MassMutual’s announcements come on the heels of a report issued by the Council for Disability Awareness that shows claim payments increased by only 0.4 percent to $9.4 billion in 2012, over the previous year. The CDA report also found fewer companies reporting disability claims incidence increases, due in part to the improving economy.
Workers are more likely to become disabled because of illness compared to suffering an on-the-job injury, statistics compiled by the CDA show. Musculoskeletal and connective tissue injuries account for 28.5 percent of all new and long-term disability claims, followed by cancer and other abnormal tissue growth (14.6 percent) and injury and poisoning (10.6 percent).
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].
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