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January 15, 2004 at 07:00 PM
Critical illness insurance has not enjoyed the same sales success here in the United States that has been seen in other countries.
Consumer awareness and lack of product education are factors, but the origin of the CI sale starts with the agent, in the trenches and in the field.
Agents have been hesitant to enter the CI marketplace for many reasons, but the major roadblock for CI sales success is failure to understand what CI insurance is “not.” (Note: U.S. consumers have also misunderstood the value of the product.)
The problem is, agents try to place CI in an insurance box they already understand.
However, although CI has attributes of many other types of insurance, it is in a box of its own.
Is CI insurancelife insurance? Health insurance? Disability income insurance? The answer to each of those comparisons is “no” but “yes” to all of the above.
The point is, trying to place CI in a stereotype category and not fully understanding the product can lead to missing out on the benefits the product can provide. Following are some examples that clarify this point.
CI insurance is not cancer insurance, as some consumers believe.
Although cancer is a covered condition within a CI policy, a cancer insurance policy requires a diagnosis of a covered cancer, and then only reimburses based on actual medical expenses incurred. Also, cancer policies only pay for cancer-related conditions, whereas a CI policy covers many other conditions in addition to cancer. A cancer policy can help with reimbursing cancer expenses, but a CI policy pays a lump-sum, up-front cash benefit that can reduce the stress of cancer and its treatment and allow the patient to recover much more quickly.
The consumers who say, “I already own a cancer policy and dont need a CI policy,” or the agents who say they dont want to focus on cancer insurance sales are both missing the boat.
A CI policy that pays its cash benefits up front so the insured can pay for uncovered medical expenses and indirect costs associated with the illness is superior to receiving payments in drips.
Critical illness is not disability income insurance, either. While DI coverage protects an individuals income, there are elimination periods to satisfy and requirements for continuous disability to collect benefits.
