Challenging Conventions in Disability Cover

Tradition is important but it shouldn’t stand in the way of innovation. At FMI, we believe in breaking the ‘rules’ where necessary to give our clients the best possibly offering. We do this through understanding who are our clients are and what they need. When it comes to how the Life Industry understands disability, we definitely do things differently.

A fresh look shows that there are gaps in the Life Industry’s traditional approach to disability. These gaps could leave clients vulnerable and under-insured. We believe traditional disability cover:

• Is not designed for the self-employed individual:
  Self-employed people approach life and business differently to salaried individuals. They tend to face different challenges when it comes to how they manage and work in their businesses. They also don’t have a company disability scheme to fall back on if they are disabled. This means they have different cover needs and most often work on a month-to-month basis so, if they don’t work, they don’t get paid.
• Tends to focus solely on permanent disability through Capital Disability cover:
  Most disability policies will pay out a once-off lump sum in the case of a permanent disability. Lump sum pay-outs leave the clients exposed on a number of fronts, from investment to longevity concerns. In addition, research shows that more people are likely to suffer a temporary disability than a permanent one, leaving them vulnerable if they do not have temporary cover in place.
• Does not offer a 100% option when it comes to covering income:
  Should disability occur, the client will not receive 100% of their income under traditional cover. This could leave them with unpaid expenses.
• Has a bad reputation when it comes to paying claims:
  Disability claims are seen as difficult to process and receive, due to the nature of such claims and complicated administrative processes.

THE FMI APPROACH

FMI understands that self-employed individuals should be treated differently as they have different cover needs. This involves taking into account factors such as volatility of income and occupation class. We do this through a unique risk assessment model, which focuses on duties rather than job titles e.g. an individual who owns and manages an electrical business with 30 staff shouldn’t necessarily be placed in the same occupational class as the electricians he employs as their tasks are vastly different.

Looking at Income Protection holistically also means less risk for the Financial Adviser as insurance premiums are protected and lapse rates are minimised.

When putting together a disability portfolio, we believe in:

• A holistic approach  that takes into account the client’s temporary and permanent disability needs
• Recognising that self-employed individuals can experience fluctuations in their income and catering for this in our product design
• Putting in place first temporary income protection cover, then permanent income protection cover
• Ensuring that permanent income protection is made up of a combination of lump sum and income replacement benefits
• Upfront underwriting to aid in a quick and simple claims process
• Providing cover for:
• The individual (through products such as BPE and Express Income)
• Their business (through optional cover such as the Business Overhead Protector benefit)
• Employees (through our Vision offering)

FMI’s holistic approach takes into account both temporary and permanent disability and makes sure that your cover will help you to maintain your lifestyle and financial stability when you need it most. It’s simple – we pay claims and we put in place processes that allow us to do so quickly and easily.