How To Sell Critical Illness Insurance? Demonstrate The Need

The easiest way to get your client to agree to the need is to ask if they know anyone whos ever had a heart attack, cancer or stroke and survived. Everybody knows someone. Then ask what their life was like for the first year or two after “surviving.”

Chances are youll hear things like: Their health insurance just didnt cover all the costs. Their DI insurance helped, but they had so many more expenses than usual that they had problems. It got to the point that they had to borrow money to get out of “illness debt” or theyd have lost their home!

Its a fact that more people survive a critical illness than die immediately from the illness. In the last 20 years, deaths due to the “big three” (cancer, heart attack and stroke) have gone down significantly. But disabilities due to those same three are up dramatically! Things that used to kill, now disable.

Here’s another frightening statistic: roughly half of all home foreclosures are due to serious medical problems, whereas only 2-3% are death related. Simply replacing lost income (DI) wont solve all of a survivors problems.

The Journal of the American Medical Association recently studied families that had experienced a critical illness. The report found:

“Many critical illness patients required considerable caregiving assistance from their immediate family members. In far too many cases, a family member had to quit work. . .to provide care for the patient. Over 30% of families surveyed reported a loss of most or all of the family savings–while others reported a major loss of household income.”

Its estimated that in 2000, the total overall cost to cancer patients was just over $107 billion. Of that, direct costs (hospital, doctor and medications) accounted for $30 billion. The remaining $77 billion were indirect costs. These are the types of things not covered by traditional major medical plans and include ongoing household expenses, costs of new or experimental treatments, loss of income while receiving treatment, loss of income while caring for a stricken family member, non-covered or out-of-network medical and physician expenses, travel expenses to specialized treatment centers, i.e.–airfares, hotel, meals, auto, etc. and home health care needs.

These indirect costs can put a strain on a familys income and savings. In fact, in many cases where one family member has contracted a critical illness, the additional stress put on the “well” family members is often too much to bear. This stress includes mental as well as financial stress.

A critical illness plan can go a long way toward relieving that financial stress. And when the financial stress is relieved, a large part of the mental stress also vanishes.

Recent research indicated that most consumers are not familiar with the concept of critical illness insurance. But once introduced to it, they found it appealing and easy to understand.

Over two-thirds of Americans are concerned about the sufficiency of their income if they suffer a major illness. Show them what critical illness insurance can do. Show it, and they will buy!

Timothy Nicholson is vice president and chief marketing officer of National Guardian Life Ins. Co. He can be reached via e-mail at [email protected].

Reproduced from National Underwriter Life & Health/Financial Services Edition, May 20, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.