Barnard: Its Time To Promote Critical Illness Insurance In The U.S.
“Would you rather have a heart attack and lose your house, or have a heart attack and lose your mortgage?”
Dr. Marius Barnard of South Africa posed the question here while keynoting at the first annual meeting of the National Association for Critical Illness Insurance, Washington, D.C.
His question targeted the key aspect of CI insurance that he believes people in the United States need to know–namely, that CI insurance provides a type of financial safety net following diagnosis of a covered critical illness.
For example, instead of losing the house to creditors, a survivor who owns a policy that covers the persons illness can use the CI policy benefits to pay off the mortgage.
Barnard said he came to the meeting to urge insurers and producers to promote awareness of the coverage and how people can use it to meet their own post-diagnosis financial needs.
Go to the media, he said. Talk about it. Get on the “Larry King Live” television show and other talk shows.
Barnards view is that, without such insurance, survivors risk losing everything they have, including their house. But if they have this coverage and the policy covers their condition, survivors can pay for rehabilitation, housing adaptations, debts and other expenses.
Barnard, who developed the first critical illness policy with Crusader Life in South Africa in 1983, is a surgeon. He served with his brother, Dr. Christian Barnard, on the famous South African medical team that performed the worlds first heart transplant.
His experience with treating patients and seeing their financial problems when they survive is, he says, what motivated him to develop and promote CI insurance.
CI insurance pays the insured a lump sum if he or she is diagnosed with a critical medical condition specified in the policy. Common conditions are heart attack, stroke and cancer, but policies often include many other illnesses. Policyholders can use the benefit any way they choose.
The policies have been sold in the United States since the mid-1990s, and market observers estimate there are now 40 to 45 insurers selling CI insurance–group and individual, as riders or stand-alone contracts. Today, in-force annual premium in the U.S. is about $100 million, according to Dan Pisetsky, president of U.S. Living Benefits, Manchester, Conn.
Now, the new CI association has formed to, among other things, spark greater awareness of need for the product.
“I think youve started an unbelievably important thing here,” Barnard said of the new association. The NACII was started with the goal of educating producers and the public about what CI insurance is and does. Its members include insurers and producers. (See related article.)
CI insurance has taken off in every country where it has been introduced, including South Africa, the United Kingdom, Japan and Canada, Barnard said.