U.S. sales of critical illness insurance climbed 37% in 2017, to $652 million, according to new insurer survey results from Gen Re.
The Stamford, Connecticut-based reinsurer found that in-force premium revenue increased 45%, to $1.6 billion.
(Related: Critical Illness Insurance Sales Rise: LIMRA)
Sales of coverage through group plans, and through individual policies purchased at the worksite rose 21%, to $554 million.
Sales of individual critical illness insurance policies grew much more rapidly: to about $98 million in 2017, from $19 million in 2016.
Gen Re analysts have based those figures on a survey of 75 carriers with an interest in the critical illness insurance market, including 51 current active issuers and 24 insurers that are either developing critical illness insurance products or thinking about developing a critical illness insurance product.
What is critical illness insurance?
A critical illness insurance policy is an arrangement that pays cash to the coverage holder when the individual insured develops a specific condition, such as a heart attack or a stroke.
The drafters of the Affordable Care Act included a provision that exempts supplemental health insurance products from the ACA underwriting and benefits rules that apply to major medical insurance policies.
The drafters of the laws and regulations that govern health savings accounts (HSAs) have established rules that let holders of HSA-compatible high-deductible major medical coverage use critical illness insurance.
How do Gen Re numbers compare with LIMRA’s numbers?
LIMRA released results of its own survey of critical illness insurance issuers in July.
The 47 issuers that participated in the LIMRA survey reported generating $627 million in sales through voluntary benefits and worksite marketing programs in 2017, up 15% from the 2016 total
Why has the critical illness insurance market been such a hot market?
Traditionally, consumer groups and patient advocacy groups argued that consumers should have rich benefits designed with an emphasis on encouraging wellness, not collections of multiple policies.
Today, however, many consumers seeing buying critical illness insurance and other supplemental health insurance products as a strategy for coping with high major medical plan deductibles and coinsurance requirements.
Health insurers see offering critical illness coverage as a way to participate in a health-related insurance market without taking on the kind of risk of underwriting risk and regulatory risk now associated with the major medical market.
— Read 7 Ways to Win the Hearts of Critical Illness Insurers, on ThinkAdvisor.