CI Insurance Isnt Just A Stand-Alone Product Anymore

In addition, the premium for this rider may also be lower, if only a portion of the life face value–perhaps 25% or 50%–is accelerated for possible CI needs.

Also, agents who prefer to lead their sales presentation with CI insurance (as opposed to traditional life insurance) can position the accelerated rider as a CI product with death as one of the covered conditions. In this way, adding CI coverage to the traditional life product can bolster life sales.

Incidentally, CI riders that accelerate from a life policy are typically considered life products by the state regulators. Such a classification can help bring CI products to market more quickly.

Life insurance is not the only product that connects easily with CI insurance. Riders for disability insurance policies or long term care insurance policies can also meet CI needs. Here, the base product benefits are not accelerated; instead, the policy pays an additional benefit if a CI event occurs.

Since CI insurance pays a lump sum that helps cover expenses not paid by other insurance–such as child care, time off work, home alterations, travel to care centers or experimental treatments, and other expenses associated with recovery from major illnesses–it is a natural fit with many of these base products.

Interestingly, consumers who cannot purchase enough disability insurance to meet their needs, such as entrepreneurs, can look to a CI component to fill the gap.

When linked with life, disability or long term care policies, the additional benefit CI rider mirrors the stand-alone CI product. However, it delivers some expense savings because it is a rider, not a policy.

Unlike the accelerated life rider, which is viewed as a life product, an additional CI benefits rider is filed as a health product. Thus, it must meet the same state requirements as apply to stand-alone CI policies.

Consumers may prefer an additional CI rider on a life product if they do not want to lose some or all of the death benefit through acceleration.

Actually combining CI coverage with another product, such as long term care, can enable producers to target the coverage to much younger ages. For instance, the average age for purchasing LTC insurance is near 70 while the typical buyer of a CI product is about 40 years old.

Even though CI is still in its infancy in the United States, many versatile ways of offering this product already are available to agents.

It will be interesting to see further innovations as the market for CI products expands. What is clear now is that adding CI coverage offers agents a variety of ways both to build business and meet important consumer needs.

, FSA, MAAA, is regional vice president of critical illness with ING Res Individual Life and Health operation, based in Denver. ING Re includes the reinsurance business of Security Life of Denver Insurance Company. Her e-mail address is [email protected].

Reproduced from National Underwriter Edition, June 16, 2003. Copyright 2003 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.