I see two simple truths in disability income (DI) insurance. The first is that DI life insurance provides a vital service. It delivers an additional ‘societal safety net’. The proof of its importance is found in APRA data which shows a value of $8 billion in claims paid annually to Australian insureds.*
The other simple truth is that our industry can do more to refocus on the underlying purpose of DI cover. One of the ways, I think, to ‘re-purpose’ ourselves is to change how we speak about DI insurance.
Many of us who are insurance professionals are accustomed to openly discussing the topics of human mortality and morbidity. It’s a necessary and everyday part of our business conversation. But this mode of language is not helpful to resolving the bigger issue of supporting insured people on claims towards rehabilitation and a life of wellbeing. It also compounds a related perception issue that DI cover delivers a form of ‘compensation’ to an insured person upon becoming disabled or unwell.
The focus must shift away from a ‘compensation’ mindset to a ‘wellbeing’ mindset. Getting people talking about maintaining a quality of life, rehabilitation and wellbeing is crucial.
Another failing of the current language paradigm is that, for a majority of Australians, the topic of premature death, unexpected sickness or accidental trauma is very confronting. This in turn leads to lower engagement by people with their insurance.
One of the enduring challenges is to find compassionate and respectful ways that allow people to be receptive to sensitive topics, to make difficult conversations easier. A focus on wellbeing enables a positive conversation about prevention.
Research such as the FSC’s Apathy to Action report in 2013 suggests that the language and manner in which insurers discuss the topic of life and DI insurance can have a significant impact on the engagement levels of consumers.
Despite 71 per cent of individuals surveyed agreeing that it was ‘their responsibility’ to ensure their family’s financial position in the event of their death or disability, the report found that common messages centred on either statistical risk or responsibility failed to resonate.
In other words, potential loss and the need to protect resonated least with consumers regardless of life-stage (FSC Apathy to Action 2013). Understanding this is relevant to helping bridge the well-documented underinsurance gap in Australia.
How can we change this conversation? Moreover, by changing the language, might this lead to a deeper appreciation of the core purpose of DI insurance?
Our industry is making substantive strides to improve how it communicates about life, death, illness and the insurance products that cover Australians, as well as the inherent value for those insured lives. But more can still be done.
Will it not be easier to discuss wellbeing insurance, rather than income protection? Perhaps return to work insurance as opposed to disability? Does ‘get back on your feet’ insurance – even as a metaphorical, not literal label – sound a more engaging prospect than ‘sickness, injury or illness’ cover?
Work is a good thing, why not focus on it as a core purpose?
A large body of evidence from around the globe points to the same conclusion – good work is good for us. Many leading experts, including the World Health Organisation, have determined that good work is good for human beings.
Leaving aside work that is back-breaking or morally questionable, the simple conclusion is that helping people to return to work, following an accident or illness, has many proven benefits. Work is often central to a person’s social identity. It gives a sense of purpose and a reason to, in effect, get up every day. The notion of assisting insureds back to work is a different proposition to simply paying out a sum of money at claim time.
A Canadian study found that at six months after ceasing work due to disability, the rate of depressive symptoms among those who hadn’t successfully returned to work was more than double the rate of similarly injured workers who had. (Source: Institute for Work & Health Canada, Mental Health & Injured Workers).
A 2011 consensus statement from Australian and New Zealand medical professions, called Realising the Health Benefits of Work points out that local and international research:
- Shows that long‐term work absence, work disability and unemployment are harmful to physical and mental health and wellbeing.
- The negative impacts of remaining away from work do not only affect the absent worker. Families, including the children of parents out of work, suffer consequences including poorer physical and mental health, decreased educational opportunities and reduced long-term employment prospects.
These are but two of many similar pieces of evidence that support getting people back to work. Not working can affect long-term health, and mental health is shown to be linked with physical health conditions.
Avoiding the negative spiral syndrome
Imagine the impact of telling someone aged in their 30s that they may never return to work again. This is significant. Experience shows us that people would prefer to be offered a pathway back to a productive working life, rather than a ‘life sentence’ of never returning to work. Again, the wording of current benefits – such as total and permanent disability are fairly blunt – and do little to offer the positives of rehabilitation, wellbeing or good future health.
Work provides not only financial support, but a sense of purpose, social engagement and mental stimulus. At the same time, sickness and injury are, of course, a reality. Without question, there is a genuine need for financial support when sickness or injury prevents individuals from working.
Disability income is, therefore, a product worth preserving, and it is in everyone’s interest that it be made sustainable for future generations. Monetary values of the benefits of DI are but one measure. We need to start incorporating the benefits of wellbeing and getting back to work.
Meredith Barnes is head of underwriting and technical services at RGA Australia
*Source: APRA Quarterly Life Insurance Statistics, March 2016. Includes lump sum as well as Disability payments.
