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
Introduction
What is Critical Illness
Insurance?
U.S. Marketplace Trends
Need for Critical Illness
Protection
Product Design
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
•
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
•
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
Medical technology is keeping people alive longer
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?
Probability of surviving C.I. before age 65 is almost twice
that of dying
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