Disability insurance: can underwriting criteria for the self-employed be based on predictors used for disability amongst employees?

Objective: This study aims to trace risk factors for disability amongst the self-employed. Knowledge about these risk factors can contribute to more evidence-based underwriting criteria for disability insurance.

Background: The trend towards privatization of social disability services in certain insurance markets creates a need to consider the appropriateness of underwriting criteria in applications for individual private disability insurance.

Methods: The authors performed a literature study and undertook a consultation amongst experts.

Results: More than 350 articles were traced. Only one article precisely matches the field of research: risk factors in underwriting disability insurance for the self-employed. Risk factors and medical characteristics in long-term disability are not identical between the employed and self-employed populations. Relevant risk factors for the self-employed are gender, age, occupational class, socioeconomic status, medical consumption, lifestyle, coping behavior, previous sick leave, replacement ratio and policy terms.

Conclusions: The scarce amount of research on risk factors for disability amongst the self-employed forces insurers to rely on the limited statistical data available and pragmatic interpretation of this data. Underwriting criteria for the self-employed can partially be based on predictors for disability for employees. Whether the self-employed and employees are exposed to different risk factors or are basically different populations needs further research. The holistic approach of the International Classification of Functioning, Disability and Health model as a framework for developing a risk assessment model, with a strong focus on personal and environmental factors, will bring the current medical model at the underwriting stage more in line with the social model at claim stage.