Logo_Munich-Re_60mm_Pantone FINALThe NDIS and improving interaction with health providers are challenges facing the industry. While it might be tempting to think that the NDIS will replace the need for personal life insurances, the NDIS plays a very different role in supporting people with disability compared to Total and Permanent Disablement (TPD) or Income Protection.

The NDIS covers the costs of providing reasonable and necessary care and support for people with a significant and permanent disability who are under the age of 65. It does not replace income, nor does it provide a lump sum that can be used at the recipient’s discretion. Those who may not be covered by the NDIS include people suffering temporary illness or injury. Even for those who are covered under the NDIS, the benefits of Income Protection and TPD are that they can provide significant sums of money to replace lost income. The funds can be put towards whatever the individual wants and there is no requirement that the money be spent on reasonable and necessary costs of care and support. There is clearly a role for both NDIS and personal life insurances to continue in providing support to people with disability.

While there have been significant improvements in the life insurance industry over recent years, there are still many opportunities for life insurers to help improve the overall experience of people going through a claim for disability. One constant challenge that life insurers face is the legislative restriction on being able to pay for treatments for insured clients. This can be frustrating when a client cannot afford to pay for an appropriate treatment themselves and must wait to access it through the public system. The industry is in discussion with the government about being able to address this restriction but in the meantime, this limitation will remain.

It has been acknowledged that there could be much better interaction and communication between insurers and health care providers. Insurers are beginning to realise how important the role of the occupational therapist is in supporting recovery and return to work outcomes. Initiatives, such as the Health Benefits of Work (HBOW), have seen the multiple and varied stakeholders who help people recover and return to work start to engage with each other, however there is much more to be done.

The term ‘life insurance’ can have multiple meanings. In one use, it is a broad umbrella term generally capturing all types of insurances that cover the life of an individual, such as: Life Insurance, Total and Permanent Disablement (TPD) Insurance, Trauma Insurance and Income Protection which may also be referred to as Disability Income or Salary Continuance. Terms commonly associated with Income Protection include partial disability and total disability. These do not refer to the permanence of the condition but whether the individual is completely unable to work (total disability) or is able to work in some capacity (partial disability). The insurer and occupational physician will most likely interact when it comes to TPD and Income Protection claims.

Historically, Income Protection has been approached on a medical basis, with minimal attention given to other factors that may affect a person’s ability to recover or return to work. More recently, there has been a shift in recognising the importance of psycho-social factors and the role these have in a person’s recovery. In 2011, the Australasian Faculty of Occupational and Environmental Medicine (AFOEM) of The Royal Australasian College of Physicians (RACP) released the Consensus Statement on the Health Benefits of Work (HBOW). This brought a greater focus into the life insurance industry regarding the evidence that work is generally good for health and wellbeing and prompted a dramatic shift in aligning claimant and insurer outcomes regarding recovery. From this, we have seen a positive shift toward more holistic approaches to claims management and supporting individualised rehabilitation and recovery interventions.

The life insurance industry has traditionally been slow to change but recent poor disability experience by insurers, coupled with a much greater focus on improving customer experiences and establishing a unique service proposition around positive customer engagement, is seeing a transformation in the industry. Through more integrated professional relationships with occupational therapists, aligning insurer and customer goals of recovery and generally improving the support provided to customers, the industry is seeking to ensure life insurance continues to provide value to people with disability and their families.

This article was submitted by the Munich Reinsurance Group