TPD: High declinature rates provoke concern about weaknesses in the benefit
Calls have been made for a working party specifically dedicated to the issues surrounding Total Permanent Disability (TPD) claims, in a bid to tackle high declinature rates and promote greater transparency of TPD.
Following Standard Life and Abbey for Intermediaries' decision to reveal declined claims statistics for critical illness (CI), and the current review of the product's definitions, Rod McKie, marketing manager at Scottish Equitable Protect, said while it is good news that Standard Life made the initial bold step to promote clarity by publishing its declined claims figures, problems still occur around TPD.
"It is all very well to make people understand the reasons behind declined critical illness claims, but what about the issue of TPD? The industry needs to go back to its grass roots and look at what is causing high declinature rates. Advisers and providers appear to be doing a good job, but is there something missing in the process or is it a flaw inherent in the benefit itself?" he said.
McKie added that releasing data on TPD claims and a broader industry approach to tackling the 50% declinature rate on TPD should be higher on the industry's agenda.
"The Association of British Insurers' critical illness working party has spent a great deal of time reviewing definitions and revising the statement of best practice, but who addresses the issues surrounding TPD? The industry must do more to take it forward," McKie said.
Admitting there are issues surrounding TPD, Kevin Carr, senior technical adviser at LifeSearch, agreed work must be done to examine the TPD benefit, but ruled out McKie's calls for a dedicated working party.
"I'm not sure we need a separate TPD working party, as it is part of critical illness and not really a standalone contract. But I do agree, as with claims, that we need to be more transparent about TPD and must consider alternative ways to improve this benefit as soon as possible," Carr said.
Agreeing, Richard Walsh, head of health at the ABI, admitted at a recent COVER Think Tank debate that more should be done to evaluate the issues surrounding TPD, but said the issue would not be addressed in the ABI's current review.
"We ought to be looking at this and we will do, but I doubt we will be able to do it in the current consultation," Walsh said.
nHave your say. Should TPD have its own dedicated working party if issues surrounding declinature are ever to be addressed? Go to www.covermagazine.co.uk to cast your vote.
