Transcript Document

The Marketplace for
Critical Illness Coverage
Presented by :
Jerry Jacobs, CLU
5416 Yale Street
Metairie, Louisiana 70003
Ph#(504)888-2242 Fax#(504)889-1753
8301 Delmar, #2W
St. Louis, Missouri 63124
Ph#314-997-0751
Cell(504)237-8710
Email: [email protected]
AGENDA
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Introduction
What is Critical Illness
Insurance?
U.S. Marketplace Trends
Need for Critical Illness
Protection
Product Design
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Marketing Applications
Global Perspective
U.S. Critical Illness
Marketplace
Q&A/Discussion – Open
Forum – Issues/Concerns
FACTS
 Approximately 1.5 million Americans suffer a heart attack each year.
Of these, 1.1 million survive at least three (3) years.
 Over 40% of the population will develop breast, prostate, or some
form of cancer at some point in their lives.
 The probability of surviving a critical illness before age 65 is almost
twice as great as dying.
Source: 1987 Employee Benefits News And Views Magazine
What Is Critical Illness Insurance?
 Critical illness insurance (C.I.I.) has
characteristics of both life insurance and
health insurance.
 C.I.I. pays a life insurance-type lump sum
benefit, upon diagnosis of one of a number
of critical illnesses rather than upon death.
C.I.I. Coverage
 C.I.I. will pay a lump sum benefit after the insured is
diagnosed with a critical illness. Virtually all products
cover the “Big Three”:
Heart Attack
Stroke
Life Threatening Cancer
 Nearly 70% of all deaths under age 75 are associated with
heart disease, stroke and cancer.
The “Big Three”
Heart Attack
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Death of a portion of the heart
muscle (myocardium) from a
blockage of one or more coronary
arteries.
Stroke
• Any acute cerebrovascular accident
producing permanent neurological
impairment resulting in at least thirty
(30) days of paralysis or other
measurable neurological deficit.
The “Big Three”
 Life Threatening Cancer
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Only those types of cancer shown by the
presence of a malignancy identified by the
uncontrolled growth and spread of
malignant cells and the invasion of tissue
that could result in death.
World Growth
 Concept developed by Marius Barnard
 Introduced South Africa in 1980s
• United Kingdom
• Japan
• Continental Europe
• Australia
• Canada
• Ireland
• United States
U.S. Marketplace Trends
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Medical technology is keeping people alive longer
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The concern today is not dying too soon – it’s living
long
People Living Longer
 65 year old male can expect to live to age 83
 65 year old female can expect to live to age 87
Attitudinal Trends
 Consumers have greater fears than premature death, such as:
• The cost of health care
• Cost of nursing homes
• Having enough income to retire
LIFE INSURANCE INDUSTRY TRENDS
 Demographics favor living benefits over death benefits
 THE RESULT: Individual life sales have declined
30% over the past ten (10) years.
Source: Marketing Edit LIMRA 1997
Why C.I. Coverage?
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Probability of surviving C.I. before age 65 is almost twice
that of dying
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Costs associated with C.I. are not covered by traditional
insurance
Why C.I. Coverage?
 EXAMPLE: Two-thirds of all cancer-related costs are indirect,
non-medical expenses, such as:
• Lost income for C.I. Survivor
• Lost income and work time for spouse or care giver
• Housekeeping and child care expenses
• Home health care needs
• Home or car modifications
• Non-covered experimental treatments
• Expenses not covered by insurance (including co-payments
and deductibles)
If you survive a critical illness, what
will you do?
 Disability Insurance – pays a percentage of the sufferer’s
monthly income and benefits are dependent upon ability to
work.
 Long Term Care – limited to a daily benefit available subject
to a hospital stay or home nursing requirements.
 Accumulation Products – intended to provide supplemental
retirement income.
If you survive a critical illness, what
will you do?
 Disability Insurance – pays a percentage of the sufferer’s
monthly income and benefits are dependent upon ability to
work.
 Long Term Care – limited to a daily benefit available subject
to a hospital stay or home nursing requirements.
 Accumulation Products – intended to provide supplemental
retirement income.
Critical Illness Insurance
 Insured has options
 The money provided by the C.I.I. empowers the insured
to exercise choice.
 C.I.I. is a consumerist product
Family/Individual Perspective
 Replace reduced earnings
 Pay off personal debts
 Cash for medical treatment or associated expenses
 Education or Retirement
Business Perspective
 Buy/Sell Agreements
• Provide ill shareholder with benefit
• Enable working shareholders to buy out ill shareholder
 Key Person
• Pay off creditors
• Executive perquisite
• Recruit replacement with similar talent
C.I.I. Product
Critical Illness Insurance is Flexible
 Life
 Health
 Disability
 Other products
Open Forum – Issues/Concerns