What advisers need to know about today’s critical illness insurance.
Critical illness insurance is turning 35 this year, but it’s still growing and evolving to meet the ever-changing needs of your client’s employees.
Sales of critical illness saw double-digit growth each year from 2010 to 2016, according to the Eastbridge U.S. Voluntary Worksite Sales Report. Overall, sales during that time grew approximately 175 percent to more than $550 million and voluntary sales of critical illness policies have now exceeded the sales of long-term disability, universal/whole life and cancer, according to Eastbridge.
But if advisers aren’t familiar with how CI can help their clients meet their goals and objectives, they should be. And they should also know how much flexible and robust these offerings are becoming.
Among CI’s advantages:
· Simplicity. Critical illness insurance is an easy product to explain and enroll. Lump sum payments make communication simple. There’s no payment schedule to explain. And there’s no coordination of coverage required.
· Flexibility. The benefits paid to insureds with critical illness coverage can be used for medical and nonmedical expenses. The lump sum nature of the benefits create flexibility that allows employees to use their payments however they see fit — whether it’s paying for a procedure, making home modifications after a disabling illness or buying gas to travel to doctor appointments.
· Simplified underwriting options. The product’s simplified underwriting options make it easy for employees to qualify for coverage by answering a few simple health questions. Many plans can even be offered on a guaranteed-issue basis, requiring no health questions.
· Creates distinction in your portfolio. Critical illness insurance isn’t a commodity product. Adding this plan to your portfolio creates distinction for your agency and sets you apart from other brokers.
· Meets an important need. Major medical insurance doesn’t cover all the expenses associated with a serious illness. In fact, most all health plans leave gaps that require employees to pay deductibles, co-pays or a percentage of their medical expenses, in addition to numerous nonmedical expenses. That’s where critical illness plans come into play, and what makes brokers so interested in offering the product to their clients.
And, because of state of American’s health, critical illness coverage is more valuable than ever.
Cardiovascular issues can be devastating to the finances and future of U.S.’s workers and their families. Heart disease/stroke is the top killer in the United States, according to the American Heart Association, claiming a life every 40 seconds.
Americans will suffer 800,000 heart attacks in 2018, but 6 of every 7 will be nonfatal. The cost of ambulance transport, ER visits and medical procedures total billions of dollars every year. And continuing care that includes doctor visits, prescriptions and home health just adds to the bottom line.
With better treatment and care, people are surviving critical illnesses today more than ever. Often with the better treatment, comes a higher price tag for care, and that’s where critical illness insurance comes in.
Many insurers have updated their products to offer more options for treatment and care related to these leading illnesses. Also, reoccurrence benefits are standard now, to provide another layer of coverage if you have the same illness again.
One reason we’ve seen growth is the expansion of illnesses and diseases that can be covered. Medical costs are high for treatment of any illness, not just the top three: cancer, heart attack and stroke. Coverage for children and diseases unique to them has also become important. The cost of care for a child can often be higher than care for an adult. Add to that the lost income for time away from work while the parent is providing care – and the gap widens.
And CI continues to evolve. Today’s offering can feature:
· Increased options for second opinion and transportation and lodging benefits. These have previously been typical in cancer plans but are now being offered as an option for critical illness.
· More flexibility of choice for your clients and their employees. You can work with some providers to custom-design plans to fit different needs.
· Coverage for occupational diseases, such as exposure to HIV/AIDS and hepatitis. The ability for plans to be tailored for an industry’s specific needs will be a great feature for many businesses and their employees.
· Additional benefits to encourage healthy behaviors to help manage or prevent disease. Some insurance carriers are offering benefits if a covered person participates in an athletic competition, walking challenge, alcohol or tobacco cessation program, or a stress or weight management program.
There’s never been a better time to offer CI.
Brokers and agents we work with really like the simplicity of a lump-sum critical illness product. It’s easy to explain at point of sale and so many employers and employees can relate to the product because they’ve been impacted by these illnesses already, whether through a family member or friend.
Critical illness insurance has become central to an offering that helps provide relief for out-of-pocket expenses that aren’t covered by an employee’s major medical plan. As more employers shift to a high-deductible medical plan with a health savings account, offering critical illness, accident and hospital indemnity plans can help round out the benefits employees need – perhaps even with employer dollars paying some or all of the premium.