According to the American Association for Critical Illness Insurance (AACII), every day roughly 4,000 American men and women are told they have cancer, 2,100 people have a heart attack, and almost 2,000 people have a stroke and are rushed to the hospital. And according to a Harvard University study published in The American Journal of Medicine in 2009, costly illnesses trigger about half of all personal bankruptcies. Most of those who go bankrupt because of medical problems have health insurance.

You may or may not be aware of these statistics. But more importantly, are your customers aware? Statistically, it’s likely that they’re not. And that spells opportunity for you.

The market for critical illness insurance is growing, simply because everyone knows someone who has had cancer, a heart attack or a stroke. Consider that one in two men and one in three women develop cancer in their lifetime according to the American Cancer Society. And the American Heart Association reports that on average, someone in the United States has a stroke every 45 seconds.

The good news for anyone who suffers one of these critical illnesses is that it’s no longer an automatic death sentence. But while you’re likely to live, you’re also likely to be broke without critical illness insurance. Medical insurance helps reduce the hefty treatment costs, but most plans don’t cover all the expenses related to treatment. And a study by MetLife found that many people are surprised to learn that their existing medical insurance doesn’t cover the full financial costs associated with these critical illnesses.

You should be educating your customers about how affordable this coverage is, and how much peace of mind it can provide them to know that a critical illness insurance policy pays a tax-free, lump sum cash benefit upon diagnosis of these conditions.

Who needs critical illness insurance?

It’s nearly impossible for anyone to predict if and when they will suffer a critical illness, but your clients should consider critical illness insurance if they fit into any one of the following categories: 

  • Their high income precludes them from purchasing enough disability to meet their needs
  • Their high-risk profession prevents qualification for traditional disability coverage
  • They have a high medical deductible
  • They don’t have health insurance
  • They’re a parent
  • They’re self-employed
  • They’re a homemaker

According to the 2012 National Critical Illness Insurance Buyer Study, about 18 percent of male buyers and 17 percent of female buyers were between the ages of 25 and 34. Fewer than one in 10 buyers were age 25 or less and just over one in five buyers were age 55 or older.

Roughly half (49%) of men and 46 percent of women who purchased individual critical illness insurance policies in 2011 were younger than age 45, according to the 2012 Critical Illness Insurance Buyer Study conducted by the AACII and General Re Life Corporation. Many young people in particular are insuring against the wrong risk: insuring against dying. But the risk of dying is greatly reduced before the age of 65.

With more and more medical plans shifting more costs to the consumer, your customers need to be aware of critical illness insurance. And this coverage mostly benefits those in their 30s, 40s and early 50s, a demographic that isn’t exactly beating down your door to buy life insurance these days. Brokers and agents who are more focused on selling their bread-and-butter product – life insurance – can do their clients a great service by educating them about critical illness insurance, and secure a nice added income stream for themselves in the process.

For more information make sure to download our free report, Critical Illness Insurance 101.”


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