Progressive Disability Scale (Progression)
The progressive disability scale (Progression) is a benefit scale agreed in private accident insurance under which the disability benefit increases more than proportionately above a certain degree of disability and reaches a multiple of the base sum insured at full disability, with 225, 350 or 500 per cent being common market levels.
How It Works
Without progression, the disability benefit equals the degree of disability multiplied by the sum insured (base sum). Progression replaces this linear relationship with a tiered scale: up to a threshold (frequently 25 per cent) the benefit is calculated at face value, while multipliers apply to the portions of the degree of disability above it. With a 225 per cent progression, for instance, the band from 26 to 50 per cent is weighted twice and the band from 51 to 100 per cent three times, so that 225 per cent of the base sum becomes payable at full disability; 350 or 500 per cent scales apply higher multipliers. The percentage therefore denotes the benefit at a 100 per cent degree of disability, not a uniform factor.
Purpose and Market Practice
Progression reflects the fact that financial need – home conversion, vehicle adaptation, care, loss of income – rises far more than proportionately with severe injuries, whereas low degrees of disability usually leave no lasting additional need. In Germany it is widely written as a special condition supplementing the AUB; in Austria the model conditions expressly provide for “any agreed progression” to be applied to the disability benefit; and in Switzerland it is likewise offered in individual and group private accident insurance. An example from practice: German AUB tariffs offer the 225 %, 350 % and 500 % scales as options, some up to 650 %; under a 500 % scale, for instance, each percentage point above 25 % adds a further 4 % and each point above 50 % a further 2 % of the sum insured. Austrian tariffs market variants such as “classic up to 100 %”, “upgrade up to 300 %” and “upgrade up to 600 %”. Progression affects only the disability benefit, not death, daily allowance or expense benefits.
Relevance for Underwriting and Claims
Because a high progression multiplies the peak benefit, the combination of base sum and progression drives premium, accumulation control and reinsurance need in group schemes. In advice it should be noted that progressive tariffs do not pay more than a linear tariff with the same base sum in the range of small degrees of disability; comparing offers therefore requires looking at the whole scale and the underlying schedule of disability percentages.