Critical Illness Insurance Living Benefits Center
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Bored Selling Insurance?
Bored Selling Insurance?
By Michael K. Carroll
Published in "Agent's Sales Journal"
AMC Publishing Inc.
Clearwater, FL
If you are bored selling the same old products that everyone else has, here is something that will definitely interest you! Here is truly the next generation if insurance coverage: CRITICAL DIAGNOSIS INSURANCE
Critical Diagnosis coverage provides a 100% lump sum benefit that is paid upon the diagnosis of a critical illness such as cancer, heart attack, stroke and others. Now, before you think you are familiar with this coverage, realize that I am NOT talking about the lump sum cancer policies currently on the market. I am not talking about a terminal illness benefit rider or provision of a life insurance policy either. Here's something that will whet your appetite! I am talking about a payment to the insured if he or she is DIAGNOSED with a life-threatening event or having a certain "critical" illness! This benefit is available in a life, health, or annuity form of coverage---a "living benefit", not a death benefit only!
Yes! This new type of life coverage will pay the death benefit upon diagnosis of one of those illneses. Again, the insured does not have to die, or be terminally ill, as most other riders or provisions require!
There's the difference. I imagine selling a policy to your client that he or she will benefit from while they are living, and not just with cash values with surrender changes in the first 20 years.
Critical Diagnosis coverage pays the face amount when diagnosis occurs, regardless of whether or not the insured has died due to the critical illness diagnosed. This means that your 55-year-old client who purchases a $250,000 policy with you, and has a heart attack next summer, gets a check for $250,000. He or she does not have to die from the heart attack. He or she only needs to survive and live.
Another example, all too common, is someone who contracts life-threatening cancer. They would receive a payment of the face amount upon diagnosis, and the policy terminates. Again, they do not have to die from the life-threatening cancer, simply be diagnosed with it. The insured does not have to be diagnosed as terminally ill.
This is a powerful statement when you realize that many of the expenses associated with critical illnesses are not covered by traditional insurance. According to the American Cancer Society's 1995 "Cancer Facts and Figures", $69 billion, or fully two-thirds of all cancer-related costs were indirect, non-medical, non-covered expenses, such as:
Home Health Care
Lost Time at Work for the Critical Illness Survivor (translates into lost income)
Lost Time at Work (income) for Spouse Caregivers
Housekeeping or Childcare Expenses
Non-covered "Experimental" Treatments
Home or Car Modifications
Travel Expenses for Specialized Treatment
Expenses not covered by Insurance, including Co-pays and Deductibles
Industry and medical experts predict that the figure will rise to over $100 billion by the end of 1998. Many people are, and should be, concerned about how they would survive financially if a critical illness were to strike them or a family member. Even if they have proper medical and hospital coverage, in most cases they have limits and do not cover "experimental" treatments.
The payment of a critical diagnosis benefit will go a long way to cover the above expenses. A major factor in a critical illness situation is the person's loss of income during the illness and recovery from the illness. It is not uncommon for patients to be off work for months during recovery of these types of illnesses, possibly never returning to the type of work and income levels they once enjoyed.
Enter this unique, new type of insurance coverage. It very well could be the biggest advancement in insurance protection and security since the turn of the century.
This type of coverage is either currently available or on the drawing boards for several insurance plan types. The benefit can be designed as a life plan, either whole life, universal, or term. It also can be structured as a "medical plan".
What Does This Mean For You?
The sales potential of this type of coverage is enormous! While it is new in the United States, consumers in other countries have embraced the idea wholeheartedly. New premium income from Critical Illness plans in Europe was $40 billion in 1996 alone. Consumers in Japan have purchased over 6,000,000 policies. The United Kingdom has experienced an annual sales growth of this type of coverage in the range of 25%.
This coverage will provide the usual income replacement needs at death, while also providing a back-up disability alternative income plan. Most consumers never get around to budgeting that extra amount for very needed disability income coverage.
While a Critical Diagnosis policy would not necessarily replace a proper disability policy in one's portfolio, it will provide cash to replace income when some of the most debilitating illnesses strike, thus covering your client to a further and very important extent. It also provides cash during the elimination period of a disability policy which commonly has a 90-day waiting period.
It adds a new dimension to the Live/Die/Quit story. Clients can benefit when a critical illness strikes. Our current insurance plans would only leave them cash accumulation values to draw upon, should they be accumulated enough to do so. Now, the quality of their life continues and does not die!
It certainly adds quite a bit of sizzle to your sales presentation! The traditional life insurance plan is now transformed into a plan that is very versatile and more acceptable to most consumers. While it is a sound idea, and people do buy insurance, your 40-year-old client doesn't really want to die to get benefit from your life plan. He or she does not really want to wait until retirement to utilize the cash accumulation either.
They are both important benefits and well worth the expenditure, to be sure. Since a heart attack, stroke, or cancer strikes three out of every five Americans sometime in their lives, wouldn't paying the face amount for these conditions sound good to your clients and prospects?
It DOES sound good to the consumer. If you understand the ramifications, it should sound very good to you, too.
What else can we do as an industry to make life insurance more versatile and more worth buying to the consumer? Adding this benefit is a giant leap for re-inventing life insuance and making it tremendouly more sellable.
So, why should you NOW be bored with your career?
Michael K. Carroll is Chairman and Chief Executive Officer of Briarwood International, Inc. He has an extensive background in the legal, actuarial, and policy design areas of Critical Diagnosis insurance coverage. Michael designs, develops, and markets various versions of this coverage for insurance companies throughout the United States. He can be reached at (540)856-3222, Fax (540)856-2110, or by E-Mail. His offices are located at 217 Pheasant Drive, Basye, Virginia 22810-0367