Showing papers on "Disability insurance published in 1977"

Some reflections on different disability models

Abstract: As a retired actuary of life and health insurance the author has wished to summarize his experience and reflections about different systems of disability insurance. He wants to show how the premium technique of the “classic” Hamza process presented in 1900 as a model of the invalidity insurance technique without any element of recovery can be described for an active person by three alternative formulas of expected value of a disability indemnity. His of interest to observe that the second of these formulas can be applied to the technique of sickness insurance based on the probability of being sick. This technique is also used in British and Norwegian long term disability insurance. The third formula leads after modification to the Swedish sickness annuity technique and, further, to the technique of basic continuance tables used in U.S.A. In describing the classic process the author has used the discontinuous approach, but otherwise the continuous approach with integrals instead of sums has been p...

Effect of the Economy on Group Long Term Disability Claims

Abstract: This article seeks to isolate the effect of selected economic variables on group long-term disability claims. It demonstrates quantitatively that disability claims are responsive to shifts in the economy and suggests a model for predicting changes in disability claim rates. This model may be useful in designing and costing a viable group long-term disability insurance program. Provisions for income continuation during lengthy disabilities recently have been added to the fringe benefit package of many firms. A study by Towvers, Perrin, Forster and Crosby (TPF /C) reveals that in 100 top industrial companies surveyed in 1973, 77 had group long-term disability programs. TPF/C reports a substantial increase in the number of companies with long-term disability plans since 1970.1 In another study, Fortune found that 86 percent of major industrial corporations had longterm disability plans in 1975.2 While there is increasing activity in the long-term disability market, there is recurring anxiety about both public and private disability experience. Because of adverse experience with the first long-term disability plans in the 1930's, some insurer executives consider the long-term disability risk to be uninsurable. Over the years, the product has gained guarded acceptance by providers, but recent experience has raised a number of questions concerning the feasibility of long-term disability coverage. "Many insurers have lost large amounts of money on LTD insurance, and relatively few insurers have written the product profitably." 3 The magnitude of the loss associated with disability protection, however, is uncertain. Donald J. Doudna is an Assistant Professor at Central Michigan University where he directs the academic insurance program in the College of Business Administration. The author acknowledges the assistance of Professors J. David Cummins and Dan McGill in preparation of the research leading to this paper. I Survey of Benefit Plans TPF/C "Top 100" Industrial Companies, Research Department of Towers, Perrin, Forster & Crosby, May 1973. 2 How Major Industrial Corporations View Employee Benefit Programs, Fortune: Market Research (New York: Time Inc., 1975), p. 15. 3 Theodore W. Garrison, "Group Long-Term Disability Insurance," Part 9E Study Notes of Education and Examination Committee of the Society of Actuaries, 1973, n14

Aid to families with dependent children: an overview, October 1977.

Abstract: In 1977, reorganization of the Department of Health, Education, and Welfare brought together in the Social Security Administration three major income-maintenance system--old age, survivors, and disability insurance; supplemental security income; and aid to families with dependent children. These are distinct and separate programs differing in purpose and in methods of financing and administration but often serving different members of the same household. The Federal-State program for aid to families with dependent children program (AFDC) is a grant-in-aid program and in many ways reflects the local policies in the 54 States and jurisdictions in both administration and levels of payments. This article outlines its national structure and variations in the program and describes how this cash assistance program operates to provide income for more than 11.2 million needy recipients in 3.6 million families, including almost 8 million children. In May 1977, program payments totaled about $840 million a month.

The Short-Run Behavior of the Social Security Trust Funds:

Abstract: The old-age, survivors, and disability insurance trust funds are now running a deficit of more than $5 billion per year. As recently as 1972, however, these trust funds were expected to be in surplus for some time. Simulations with an econometric model of the OASDI system suggest that this turnaround can be explained largely by economic developments unforeseen in 1972. The deterioration in the social security short-term financing picture is due in roughly equalparts to high unemployment and poor real wage growth. Inflation by itself has so far had little effect on the trust fund balances. The simulations also suggest that social security trust fund balances equal to approximately 60% of yearly outlays should be kept on hand if the system is to be able to withstand a recession slightly more severe than the present one without having to raise taxes until unemployment falls below 6%.