As employees become more and more responsible for their own health care costs, critical illness insurances popularity is continuing to grow in an effort to fill that gap. In fact, employees fear the financial impact of a critical illness more than dying from one 47% versus 29%, respectively, according to a Sun Life Financial survey.
Further, according to MetLife, in the last five years, the average employees share of health care costs has increased more than 50%. Even with disability benefits, families may not be prepared for the financial impact of an unexpected health issue which can be as high as $14,444 for a critical illness, according to MetLife.
In 2013, critical illness sales were up 6.4% through the third quarter, compared to the previous year nationwide, according to Janet Buzil, president of the National Association for Critical Illness Insurance. In the third quarter alone, growth was 8.4% over the previous years third quarter. Lots of folks are entering the market or updating their products in worksite, she explains.
Buzil, who is also VP of marketing and product development at Glenview, Ill.-based Combined Worksite Solutions, says at her company, CI sales have more than doubled in 2013.
Similarly, Unum has seen a 20% growth of the product in the last four years. There is more consumer awareness of the need for critical illness insurance [with] better education from the company standpoint. And weve done a better job educating brokers, says Debbie Cecil, director, product and market development at Unum in Chattanooga, Tenn.
At the same time, Brokers are doing a better job educating employers, she says.
Health care reform is No. 1 in peoples mind and there is such a need to take care of those unexpected expenses, Cecil adds. Medical insurance cannot pay for everything.
Bringing the coverage
Still, employees are looking to their employers for this coverage. The MetLife survey found nearly 6-in-10 employees would feel positive about their employer if they offered accident and/or critical illness insurance.
Buzil says the average age of a purchaser of the product is around 40-41 in worksite sales, as people in that age range are seeing what happens to their parents. It becomes very real to you when you see other people having a heart attack, she says. A lot of people in their 30s and 40s see a lot of cancer. It is big a drain on your savings and you dont have to be old to get cancer. Critical illness insurance is giving that 40 year old piece of mind.
Critical illness insurance is continuously ranked as a top voluntary product that brokers are interested in, says Randy Finn, assistant vice president of development at Colonial Life in Columbia, S.C. Over the last five years or so commissions are being impacted and voluntary products represent not only additional revenue but also an additional way to help an employer provide additional coverage.
It is like life insurance when you are living. The employer is not paying for it, Finn adds. Brokers are very interested in critical illness insurance, targeting a real need for their employer clients.
