Be Wise About Disability Insurance

Katt, Peter
June 1997
Journal of Financial Planning;Jun97, Vol. 10 Issue 3, p22
Academic Journal
This article presents information on problems associated with disability income insurance (DI). One of the major problem associated with DI is underpricing. This problem is primarily due to selling DI policies with guaranteed premiums at a time of historically high insurance company investment yields which have since returned to more normal levels and much higher claims experience than expected. Although there are many problems that have contributed to possible DI underpricing, it can be instantly cured if DI policies were priced to the market.


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