Consumers are becoming increasingly aware of the need to protect against critical illness early in life, according to a recent study.
A recent study conducted by the American Association for Critical Illness Insurance (AACII) and General Re Life Corporation found that the majority of new policies sold in 2011 were to buyers between the ages of 35 and 54. Roughly half of the men and women who purchased individual policies in 2011 were younger than age 45.
"While the majority of critical illness insurance sales continue to be made in the work setting, sales to individuals are increasing as awareness grows," said Jesse Slome, AACII executive director.
The first critical illness policies became available in the U.S. around 1996 and today over one million individuals have such protection. Critical illness insurance is designed to help individuals bridge the financial gap between traditional insurance coverage and the added costs associated with a critical illness. It typically pays a tax-free, lump-sum cash benefit upon diagnosis of a covered critical illness, such as cancer, heart attack or stroke, according to the AACII.
Medical advances have reached the point where the majority of people survive a critical illness, Slome noted. But survivors are usually unable to get all their healthcare needs covered through standard health insurance. Survivors may also be unable to work for prolonged periods, putting them under even more financial pressure. Critical illness insurance is meant to ease these kinds of burdens, Slome said.
"You are going to see large numbers of people looking, understanding and buying it," Slome said.
MetLife, Colonial and AFLAC are among the leading sellers of critical illness insurance in the multi-life arena, while Mutual of Omaha and Protective are targeting sales for individual policies, Slome said.
The AACII is the national trade association providing information to consumers and insurance professionals, whose goal is to create heightened awareness among consumers for the need and benefits of owning individual and employer sponsored critical illness insurance.