With today's medical advances, it's no secret that people are living longer than those in previous generations. Unfortunately, a longer life does not always mean a permanently healthy life. The fact is, the longer a person's lifespan, the more likely it is that that person will become afflicted with a critical illness. For this reason, it is important that insurance agents enlighten their customers and prospects on the benefits that a critical illness policy can bring to an individual or family in the unfortunate but increasingly likely event that a critical illness strikes.
Heart disease, cancer, and strokes are three of the most common critical illnesses that a large percentage of Americans may at some point suffer from.
The good news is that the chances of consumers surviving these or other critical illnesses are far greater than they were just 10 years ago. Because of this, however, many do not think about the risks involved if they became critically ill with no safety net. Agents, however, can educate their clients about how important it is to plan for their potential future right now.
It is important to ask your clients meaningful questions about how they foresee their future should they become critically ill. Encourage them to face tough facts about how they or their family would be affected. For example, ask them how far their savings will stretch in the event of a critical illness. Would they be able to cover all of their medical expenses if they were unable to work?
It's not just the health expenses themselves that many consumers are unable to pay. There are also indirect costs stemming from treatment and recovery, everyday living, and, for some, the debt that was accumulated before they got sick but now may be difficult to continue paying down in the face of new and more pressing expenditures. When faced with mounting medical bills and a limited ability to continue working, it is not uncommon for people to tap into their assets -- sell their home, liquidate their retirement assets, etc. -- or rely on family or charity to get through the situation. In fact, according to the 2002 LIMRA report "Critical Illness Insurance: A Lump Sum Review," 33 percent of American families deplete all or most of their savings because of a serious illness.
Primary health insurance may not provide the coverage your clients need to survive a critical illness and lead a normal life. In fact, according to a recent Harvard University study, hundreds of thousands of Americans file for personal bankruptcy because of medical bills even though they have health insurance.
With your clients, you may want to consider stressing the value and benefits of critical care insurance. Many may not realize all the expenses that might not be fully covered under a primary health insurance plan, such as:
o Out-of-network medical treatment
o Experimental treatments
o Home and/or automobile modifications (e.g., wheelchair ramps)
o Rehabilitation
o Insurance copayments and deductibles
o Home health care
o Prescription drugs
o Travel for treatment
Critical illness insurance policies can allow the insured to maintain their quality of life while allowing them the financial freedom to use the benefit however they choose. Many supplemental insurance providers offer products that provide living benefits that consumers can use to pay for expenses that their primary health insurance doesn't cover.
As for how much coverage a person may require, one year's salary is a standard industry estimate. Considering that a typical premium for a 30 or 40-year-old might be as low as $5 to $20 per month, your clients might be surprised by the level of coverage they can afford, even if they're on a tight budget.
And remember to inform your clients that some policies offer a choice of riders that allow an individual to pay for their coverage for a set amount of time and keep the coverage while no longer paying premiums or having the money returned if they don't need the coverage.
Des Bosnic is executive vice president of U.S. sales for Combined Insurance, a provider of supplemental accident, health, and life insurance products. For more information, call 800-225-4500 or visit www.combined.com.
