Lloyd’s Disability Policies Are NOT Created Equal
As you weigh the pros and cons of disability insurance products from various carriers, be mindful that not all income protection policies are created equal, and wordings, definitions and claim viability can vary drastically, even amongst differing sources from the same marketplace.
Most high-limit, excess disability and impaired-risk disability products stem from the venerated Lloyd’s of London market. And although an insurance certificate may name Lloyd’s as the insurer, there are numerous, separate underwriting syndicates (companies) that write income protection and disability insurances in the marketplace under the Lloyd’s banner. Each have their own policy chassis which can include varying definitions, limitations, exclusions and benefit structures.
Over the years, Petersen International has reviewed and been privy to many different policy specimens from various underwriters in the Lloyd’s market, and some alarming policy weaknesses have come to our attention. While we won’t go into all of the many specifics, we need to warn there are clauses in policies that allow the insurer to prematurely cancel coverage at their own discretion without cause. Some policies require the client to be working full time at the moment of disablement to qualify for benefits, while others don’t count residual or partial disablement periods towards satisfying the disability policy’s elimination (waiting) period.
These are just a few of some of the serious shortcomings that can affect the performance of a disability insurance plan, and these should be brought to the attention of discerning brokers and agents and to their trusting clientele.
You owe it to yourself and to your clients to read the fine print as you would while comparing policies of domestic disability carriers. Pay special attention to the policy definitions and limitations. A disabled client who owns a DI policy with inferior wording will not be a satisfied customer.