INVALIDITY DISABILITY BENEFITS IN LIFE When we think of disability as related to its cause, we are apt to think first of disability arising from accident. As a matter of fact, however, only about 3 or 4 per cent of a company's disability claims arise from this cause. The two major causes of disability are tuberculosis and insanity or mental infirmity. Probably a third of a company's claims under the disability clause will be tuberculosis claims and about a quarter of the claims will be insanity claims. Paralysis is the third most important cause of disability. As to tuberculosis, it is evident that there is wide opportunity under the present wording of the disability clause for the practice of companies to differ. The contract requires that disability shall not merely be total but shall be permanent. Obviously it is difficult or impossible to show that tuberculosis will presumably progress to a fatal termination until some time after the condition has arisen. A liberal interpretation of the contract, however, requires that claims should be admitted as soon as the disease has produced incapacity to labor and the insured has given up his work and placed himself in a sanitarium or under treatment designed to arrest its progress. Another difficult question in the adjustment of claims is the requirement of the contract that the insured shall not merely be permanently and continuously prevented from engaging in his usual and customary occupation but that he must be permanently and continuously prevented from engaging in any occupation whatsoever for remuneration or profit. This leads us to a discussion of the general question of what constitutes permanent and total disability within the meaning of the contract. The Bureau of War Risk Insurance has defined total disability as "any impairment of mind or body which renders it impossible for the disabled soldier to follow continuously any 1 From article by J. H. Woodward. Casualty Actuarial and Statistical Society of America. Proceedings. 7 10-22. November 17, 1920. substantially gainful occupation. Total disability shall be deemed permanent whenever it is founded on conditions which render it reasonably certain that it will continue throughout the life of the person suffering from it." The Compulsory Health Insurance bill passed by the New York Senate in April, 1919, defined disability as "inability to pursue the usual gainful occupation" of the insured. The German compulsory insurance law defines invalidity as total when the earning power of the insured is reduced to one-third of the normal. It has been held by the Indiana Court of Appeals (Indiana Life Endowment Co. vs. Read, 54 Indiana App. 450) that if the policy entitled the insured to recover if he becomes totally and permanently disabled from performing any kind of manual labor upon which he depends for a livelihood, the insured can recover if he becomes totally and permanently disabled from following any business by which he might reasonably earn a livelihood. Again, in order that disability may be construed to be total it is not necessary that the insured should be absolutely helpless. Total disability is a relative matter and is held to depend on the peculiar circumstances of each case and on the nature of the occupation and the capabilities of the person injured. The real test is loss of earning power. An investigation of the causes of permanent total disability indicate that a large majority of them would incapacitate a man from performing the duties of any occupation whatever as well as the duties of his regular occupation. This gives ground for hoping that some way may be found to safely remove the present limitations so as to make the benefits apply to total disability from performing the duties of the insured's regular occupation. There are several types of cases where disability benefit should be granted with great caution, if at all. We have seen that the principle cause of disability is tuberculosis. Hence the benefit should not be granted at regular rates to underweights at the younger ages unless the family history and other features of the risk are exceptionally good. Mr. R. G. Hunter has recently pointed out that in the case of tubercular family history the disability rate bears "a much higher percentage to the normal disability rate than the mortality rate due to tubercular family history does to the normal mortality rate." Next to tuberculosis, insanity and paralysis are the most frequent causes of disability. It follows that the benefit should not be granted at standard rates where there is a personal history of mental or nervous disorder or of any lunatic infection or where there is more than one case of insanity or nervous disease in the family history. Another group to which the benefit should not be granted is unmarried women who are not in receipt of a salary or wages. Where a disability clause is attached to a policy issued to a woman, it should provide that the clause shall be cancelled upon the marriage of the insured. There are doubtless self-supporting married women to whom the benefit might safely be granted, but these are not to be readily distinguished from the others. The health insurance bill drawn by the Social Insurance Committee of the American Association for Labor Legislation stops short with what is known as sickness insurance, meaning sickness of reasonably short duration, that is, twenty-six weeks, not because that committee did not believe that invalidity should be taken care of, but because social insurance perhaps may best be introduced by stages, as it always has been. It is quite true that after you have covered a part of it, the thing that it really does is to point out clearly that the other part of it is not covered. It is quite true that when people have been sick twenty-six weeks and are not well, the need of provision for them is more apparent than ever. Invalidity, in other words, is merely prolonged sickness. The committee in the standards, which were adopted before drafting the bill at all, put in provision for invalidity. The question as to whether invalidity was to be covered by the sickness insurance bill itself was repeatedly before the committee, and that was reluctantly abandoned because it did not appear that there was anything like so much education in favor of it, as there was in favor of health insurance itself. I speak advisedly when I say that, should any legislature wish to take up the question of combining invalidity with sickness insurance, we should be very glad to cooperate to prepare amendments to the standard bill, which will make that provision. 1 By Miles M. Dawson, Consulting Actuary, New York. United States Bureau of Labor Statistics. Bulletin no. 212. p. 729-30. 1917. ་ This brings me to the relation between invalidity and old age, about which I think it would be proper for me to say a few words. The truth is that people resent being retired if they are really capable of doing their work, merely because they have reached a certain age. I refer particularly to workmen ; that is not so true of staff employees, who are, not infrequently, impressed with the fact that the time has come when their services are not worth as much as formerly, and they, having probably saved considerable money, can look forward to a comfortable life upon a pension. But the workmen as a general rule do not wish to quit their work until they have to; in other words, nothing but invalidity forces them to accept the pension. The British Friendly Societies, before there was a law on the subject at all, provided invalidity pensions. Had there not been an old-age pension law in Great Britain before sickness insurance, it is my opinion that there never would have been an oldage pension law; there would simply have been sickness insurance, and whenever a workman became broken down and unable to do his work at any age, whether eighteen or eighty, the invalidity pension would start. Something similar to that could be done here if we desired. 1 SICKNESS AND INVALIDITY INSURANCE 1 It is quite clear that as an economic problem invalidity is of equal importance with that of sickness, and, as far as the individual cases are concerned, of even greater importance. There can be no question as to the desirability of the insurance method of provision against it. The real problem is whether invalidity for insurance purposes should be merged with sickness, on which it borders on one side, or with old age, on which it borders on the other; or whether, finally, it should be made a matter for distinct treatment. The predominating method under compulsory sickness-insurance systems is to deal with temporary total disability, and leave invalidity to the old-age insurance systems. That is essentially the German plan, followed by most continental systems. Under this system temporary invalidity may be treated by the sickness-insurance institutions, primarily as far as periods 1 From article, Standards of Sickness Insurance, by I. M. Rubinow. Journal of Political Economy. 23: 221-51. March, 1915. |