As private group benefit plans rates are increasing in some markets, we are seeing (at times) substantial rate increases in Long Term Disability. Below are some examples of why this is happening:
The Long Term Disability market is experiencing a significant increase in claims incidence.
The Evolution of new disabilities, advances in medical technologies and aging population have contributed to increasing risk in the LTD market.
The global economy is in recession and this typically leads to higher than expected claims incidence.
Interest rates are at their lowest level in four decades and these low interest rates reduce the reserves to pay claims, which requires additional funding.
Canada Pension Plan has “tightened” their adjudication of disability claims. This shifts liability to the private sector and Long Term Disability plans.
Original Post – December 21, 2011