A look behind Trustmark’s CI product development

Critical illness insurance is among the fastest growing voluntary benefits, but it’s also among the most difficult to grasp for employees.

However, Dan Kraft, vice president of product and innovation for Trustmark Voluntary Benefit Solutions, a division of The Trustmark Companies, told attendees at last week’s Workplace Benefit in Atlantic City, N.J., that his firm has learned a lot about CI and put much of that knowledge into the company’s new Critical LifeEvent product. And, he said, benefit advisers and brokers who talk to their clients about CI insurance can take a lesson from what Trustmark learned.

“Err on the side of simplicity,” he said.

Voluntary health insurance hit $2.6 billion in 2013 sales, a 13% increase from the prior year, according to LIMRA, the life insurance and market research association. Increases for critical illness, accident and vision products hit double-digits, which were the main reason the voluntary market was up for the third straight year. 

But those who offer CI, Kraft said, “sell something that’s really complicated.”

In developing its new CI insurance line, Trustmark, according to Kraft, did some initial research to understand the market. The effort revealed that policies are dense and that many CI claims are rejected because there are so many conditions attached to these policies. The company also found that 90% of all critical illness claims were paid for just three illnesses: cancer, heart attack and stroke.

Also see: Critical illness coverage ‘becoming a standard offering’

The company then did more in-depth research, which included focus groups and surveys.

Focus group participants were asked their thoughts on CI insurance. One top issue was that policies were limited in what they covered. Another was a desire for coverage that provided more cash for expenses.

The company also looked at a 2012 survey that was done to determine which base features and services increased interested in CI purchases. Among the findings:

• 70% wanted a payout for early identification for issues such as mini strokes and skin cancer.
• 64% wanted a payout for early diagnosis, including artery obstruction and stroke with limited impairment.
• 48% wanted a payout for other conditions such as Alzheimer’s and diabetes.

And Trustmark didn’t stop probing. In 2013, the company did a survey that asked people what they wanted to see covered in CI insurance. Major organ failure, Alzheimer’s and complication due to diabetes and paralysis topped the list.
The company considered all that research when it created Critical LifeEvents. Kraft touts the following:

• It allows a benefit for early identification or early-stage diagnosis for heart attack, stroke and cancer.
• It pays as the disease progresses even after other benefits have been paid for an early identification or early stage diagnosis.
• It provides access to a health adviser and medical experts who can review treatment options.
• It provides caregiver benefits when a policy holder is caring for an eligible family member.
• It offers optional coverage for other conditions such as diabetes and central nervous infections.

The CI challenge for carriers is to figure out how to create policies that meet potential customers’ needs while being simple enough to understand. And Trustmark believes it hit the mark with Critical LifeEvents.
The product is being rolled out now with targeted policy effective dates sometime in the first quarter of next year.