The insurer trade body ABI has made another attempt to change the name and definition of total and permanent disability (TPD). This time the proposal is; irreversible life-changing disability. At present it is just a consultation, and even if it goes ahead, insurers do not have to agree to the change. This is part of a seemingly never-ending tinkering with the wording of critical illness insurance policies.
Not content with a simple - irreversible life-changing disability title, it has five sub-definitions;
- unable to do your own occupation ever again
- unable to do a suited occupation ever again
- unable to do any occupation at all ever again
- unable to do three specified work tasks ever again
- unable to look after yourself ever again
Although claiming that this language is simple, even insurance advisors are very concerned that it is long-winded, wordy and subject to legal challenge. How many consumers know what “suited occupation” is? The first three sub-definitions are confusing and contradictory. If the definition is “any occupation" you could be a brain surgeon but if still capable of pushing trolleys in a supermarket, the claim would be denied.
With any claim, it is not the policy wording that causes problems, but how that wording is legally interpreted. The new suggestion could bring as many if not more problems than the existing one.
Perhaps the real solution is for insurers to do what is done in virtually every other type of insurance: work out their own wording themselves and not depend on a committee to do it for them with a compromise result. You don’t see Porsche asking Ford for help on designing a car door, so why should insurers be subject to agreement with their competitors?