CI/LTC Packages Could Spur Sales Of Both Lines Of Insurance
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Industry interest in critical illness offerings appears to be substantial, yet sales have been relatively modest. What can be done about it?
There is a similar problem with long term care insurance. LTC sales continue to lag in the pre-retirement years. Considering that most incidents of chronic illness dont occur until well into retirement, this LTC trend is predictable. Even so, marketers want to know: How can we address the LTC sales lag, and the apparent unwillingness of individuals to fund LTC until it gets to be quite costly or too late (i.e., if the consumer is no longer insurable)?
My suggestion: Address both issues by linking the two types of benefits. Before seeing how that can happen, it helps to review todays CI landscape.
Interest in CI insurance is rising in many sectors. Associations want to offer it to members. Insurers want to offer it through associations. Reinsurers see it as a win-win. And the media is tuning in.
Why the interest? People are beginning to see CI insurance as a product that will help consumers who have been stricken with a chronic illness to pay down debt, make up for lost wages, and fine-tune their retirement planning. They recognize that the myriad advances in emergency care and drug efficacy have enabled people to survive life-threatening illnesses, only to live in dire financial straits thereafter. In short, awareness is growing that people have a major need for a financial protection product that addresses this exposure.
This is a need that has been inadequately addressed until now. It shows up in many aspects of life that formerly have not been acknowledged.
For example, if an individual belongs to an HMO that does not offer the highest level of treatment for the persons critical illness, the patient will likely need to travel to a major regional medical center to obtain appropriate care. The health plan may pay for the cost of care, but what about the cost of travel to the facility and the ancillary costs such as childcare? Other critically ill people may need special housing adaptations, such as ramps and widened doorways.
The driving question is: Where will the money come from to cover these extra costs?
