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Aflac Inc. (AFL - Analyst Report) has launched an enhanced group short-term disability insurance product to protect employees from losses due to short-term disability.

The new product features increased disability benefits, optional benefits for pre-existing conditions, and optional limited benefits for mental illness and alcoholism/drug addiction. The new insurance product also offers the benefit of higher income replacement coverage, increase in maximum benefit, lowered minimum-hours requirement, lowered minimum-income requirement as well as waiver of premium.

Individuals can face shot-term disability anytime. This will not only result in loss of income but also increase medical costs. The new product offering will thus help individuals remain insulated during such time by providing alternative income as well as partial disability benefits.

According to the Social Security Administration, more than 25% of people aged 20 currently will be disabled before they reach the age of 67. We expect Aflac’s new offering to capitalize on the opportunity and leverage premiums written by it.

Aflac focuses on designing new or enhancing its insurance products. This helps individuals or groups in emergency and in turn ensures a steady revenue stream for the company.

In the last reported quarter, Aflac delivered operating earnings per share of $1.69. The reported result was ahead of the Zacks Consensus Estimate by 4.3% but missed the year-ago earnings by 2.9%. The Zacks Consensus Estimate for the second quarter of 2013 is currently pegged at $1.51, reflecting a year-over-year decline of 6.4%.

The estimate stands near the upper end of Aflac’s second-quarter guidance of $1.41–$1.56 per share. Aflac also anticipates earnings to grow by 4%–7% or about $6.86–$7.06 per share in 2013. However, the Zacks Consensus Estimate of $6.17 for 2013 lags the company guidance.

Aflac carries a Zacks Rank 3 (Hold). Accident and health insurers like Amerisafe, Inc.  (AMSF - Analyst Report), carrying a Zacks Rank #1 (Strong Buy), and Employers Holdings, Inc. (EIG - Snapshot Report), and StanCorp Financial Group Inc. (SFG - Analyst Report) carrying a Zacks Rank #2 (Buy), are worth considering.

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