by Leila Morris
In the following interview, a leading crticial illness insurance marketer takes a look at the state of the industry.

California Broker Magazine: What is the market for critical illness insurance?

Slome: The market potential for this product is quite large. It ranges from young people in their 20s and 30s to those in their 50s. From salaried people who want to have cash to pay a year's worth of mortgage payments while they recover from a critical illness and rebuild their life, to business owners who use this to supplement disability coverage.

California Broker: What is critical illness insurance and what illnesses does it cover?

Slome: This protection provides a lump sum, tax-free payment if a policyholder suffers from certain specific critical conditions.

Cash payments can range from $10,000 to $1 million and are paid when the individual is diagnosed with a covered condition.

The cost for coverage is based on the applicant's sex (men pay more than women), the age at the time of application, health conditions, and whether one uses tobacco products.

Some insurers will offer simplified issue protection in which only a few health questions are asked. Generally, for coverage amounts over $50,000, the insurer will request medical information. A growing number of life insurance policies now offer optional critical illness protection riders.

It is important that you specifically ask the insurance professional you work with and read your policy carefully because each company sets its own covered conditions.

The three primary critical illnesses covered are: cancer, heart attack, and stroke. Critical illness insurance policies may also cover such conditions as, heart transplant, coronary bypass surgery, angioplasty, kidney (renal) failure and a major organ transplant

California Broker: Is it worthwhile for a person to buy critical illness coverage if they
already have a health plan?

Slome: Medical problems contributed to over 60% of all bankruptcies in the United States. A Harvard University study found that 77.9% had health insurance at the start of the bankrupting illness.

Your health insurance no longer covers all costs. And, while you are undergoing treatment or recovering for an extended period of time, you will still have to pay your rent or mortgage, credit card bills, school tuition, real estate taxes, food, electric, and gas utilities — even your insurance.

California Broker: Are there certain types of consumers or situations in which it would not make sense to buy critical illness insurance?

Slome: Of course. Those without enough income to pay for ongoing premiums or those with little to protect. And, of course, those who clearly can't health-qualify because of current health conditions or prior medical problems.

California Broker: For years, people have been saying that critical illness coverage would catch on in the United States. Is it finally starting to get popular?

Slome: With apologies to all who are reading this because this answer will sound egotistical; I believe that our organization will change the landscape of the sale of critical illness insurance by educating influential consumer media, which will, in turn, educate consumers. Launched in mid-2009, the mission of the American Association for Critical Illness insurance is to put this product on the map in the United States. Until now, critical illness protection had never taken off because many consumers have never heard of it. How many agents want to make the effort to sell a product that no one has ever heard of? The answer: very few.

It's not yet popular and the process will not be overnight, but it will happen. It's simply a matter of when agents jump on board. We've been highly successful with our efforts on behalf of long-term care insurance. Frankly, the critical illness story is more powerful and aptly suited for our time.

California Broker: What is more popular, cancer insurance or critical illness insurance? Is there any reason for a person to buy both?

Slome: Remember the great Miller Lite commercials? "Tastes Great, Less Filling." Why would you want a beer with just one of these desirable qualities? Consumers wanted both. Miller understood that and sales followed. Why would a person want protection for just cancer versus protection for cancer, heart attack or stroke?

California Broker: As a voluntary benefit, how popular is critical illness insurance?

Slome: The vast majority of sales currently are made through the workplace. That will continue, but I predict the individual marketplace will grow exponentially in the years ahead.

California Broker: Why should brokers attend the Critical Illness Sales Boot Camp?

Slome: Every attendee will leave with marketing tools they can actually use to generate prospects and you'll be able to meet face-to-face with insurers. We are bringing top national experts to Anaheim to teach producers how to market and sell critical illness insurance. They will focus on both individual and multi-life markets. The focus will be selling, not product commercials.

We are only holding this event one time. Early registration, using the
California Broker discount, is only $39. But early registration ends April 15th.
Save $20 when you write "CB" in the Promo Code box. The fee includes a one-year membership in the Association and access to our online Learning, Marketing & Sales Center. For details, visit http://www.aacii.org/sell.

 

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