Thanks to advances in medicine, we have a better chance than ever of surviving a critical illness such as a stroke, a heart attack, or cancer. But any one of these conditions can be financially devastating.
Most health insurance plans cover the diagnosis and treatment of these serious illnesses, but leave the policyholder on the hook for co-payments, co-insurance, high deductibles, and any experimental treatments. And they won’t pay the rent or mortgage if the insured is out of work, or pay for transportation to a treatment center or to see an out-of-network physician.
Unfortunately, too many people find out too late about these gaps in coverage.
But that’s starting to change. The recession and slow economic recovery have renewed people’s interest in financial protection, and more consumers are buying critical illness insurance to help close the gaps in their healthcare coverage. In fact, according to an article in Business Insurance, insurance carriers selected critical illness as the industry’s top growth product over the next two to three years in a survey conducted by Eastbridge Consulting Group, “Worksite/Voluntary Product Trends 2012 Frontline Report.” In 2011, critical illness insurance sales increased 20 percent and totaled $243 million, according to Eastbridge.
There are several significant factors driving the growing need for this coverage:
- Many families don’t have enough savings to cover the out-of-pocket expenses associated with a critical illness
- Healthcare costs are projected to continue rising faster than inflation
- Employers are increasingly shifting more healthcare costs to their employees
- Approximately 90 percent of disabilities are caused by illness rather than injury.
- Medical problems contributed to 62% of personal bankruptcies.
- Stroke is the leading cause of serious long term disability.
Should you be selling CI?
It’s clear the need for critical illness insurance is growing. Here are a few other trends to consider…
- Some employers are paying for part or all of their employees’ premiums. It makes a lot of sense if their employees are in a high-deductible plan, because it still saves the employer money.
- Some CI coverage now includes a health screening benefit. This reimburses the insured for screening such as EKGs, mammography, and other wellness tests.
- Some carriers are now offering plans with more staggered benefits, depending on the needs of the employee, such as hospitalization. These plans can often be more affordable than lump-sum cash plans. With more client needs such as missed work and additional out-of-pocket costs, these plans can ease the financial burden of a critical illness.
- Some carriers offer dependent child benefits along with the critical illness benefits at no additional cost.
- Like many products, “good health” buys CI. Encourage clients to lock in rates now, before they are diagnosed.
While only a handful of carriers sell individual CI plans, that’s bound to change as the Affordable Care Act’s individual mandate kicks in and people have to buy major health insurance. Self-employed people might choose critical illness insurance as a gap filler for their high-deductible plan. Small business owners might buy the coverage as a way to help support their business and pay their employees if they get sick.
As the healthcare landscape continues to evolve, Americans are struggling with how to make sure their families are financially protected from a medical crisis. And they’re thinking more about how to protect their retirement savings. Critical illness insurance is a win-win for employers and individuals alike. It allows employers to make their benefits programs more attractive, and it allows individuals an affordable way to minimize the financial impact of a critical illness. That leaves everyone free to focus on recovery and wellness, and that kind of peace of mind is priceless.
Want to know more? Call the experts at DIS to find out how you can grow your business by adding critical illness insurance to your sales toolkit. Also download our all-new critical illness handout to share with your prospects.