How to Insure Your Income: Shorter Benefit Periods

Insurers also will need to shift to shorter benefit periods to reduce claims expenses. A 40-year-old doctor who goes on claim with a lifetime benefit period could live to be 80 years old or older. A $10,000 monthly claim could become a claim in excess of $5 million.

Even a to-age-65 benefit period places the insurer at considerable claims risk. If a particular occupation lends itself to a high degree of stress-related disabilities, then possibly the benefit periods should be restricted to a maximum of five or 10 years. It is possible that soon even a to-age-65 benefit period may be a thing of the past.