BY TODD V. MASON
CRITICAL ILLNESS INSURANCE has been in the employee benefits spotlight for the past decade. It’s one of the industry’s top growth products, with sales up 14% last year to $846 million.
Obviously, this trend started long before anyone had even heard of the coronavirus—and with good reason. Heart disease has been the leading cause of death in the United States for decades, and more than 600,000 people in this country will die from cancer this year. Thanks to better treatment, technology and detection, many more people are surviving these critical illnesses—but with a big price tag.
Medical costs for cancer total $80 billion in the U.S., while costs for cardiovascular disease treatment are projected to more than double from the current $318 billion to $749 billion by 2035. Add indirect costs to the tab—lost time at work, paying for additional services at home, transportation, child care and other expenses—and it’ll skyrocket more than 55% to $368 billion during that time.
COVERAGE EVOLVES TO MEET NEW NEEDS
COVID-19 has now grabbed the headlines when it comes to serious health concerns. The good news is the vast majority of those who contract the virus survive. The bad news is—like heart disease, stroke, cancer and other critical illnesses— treatment can be costly. Public health experts estimate 15%–20% of people who get COVID-19 and seek treatment may need a hospital stay. Those without health insurance could see bills exceeding $73,000, and nearly $40,000 even for those with private insurance using in-network providers.
Some critical illness carriers are responding to this need for expanded financial protection by adding infectious disease coverage to their plans. The coverage may be offered as a rider that provides a lump sum benefit employees can use to help pay health care expenses, nonmedical costs or even day-to-day bills. Benefits typically are payable for hospital stays of a set number of days, such as seven or 14. Covered conditions can include COVID-19 as well as a wide range of other infectious diseases such as antibiotic-resistant bacteria, Legionnaires’ disease, meningitis, Lyme disease, sepsis and more.
Another way the latest critical illness plans are increasing their value is by expanding the covered conditions. Some plans cover 50 or more different serious conditions and treatment procedures such as heart attack, stroke, cancer, organ failure or coronary artery bypass graft surgery. Plans may pay benefits for multiple different critical illnesses as well as reoccurrence of the same illness, including cancer.
Additional conditions covered for children can include Down syndrome, cystic fibrosis, cerebral palsy, spina bifida and cleft lip or palate, often at no additional cost.
Wellbeing assistance benefits are another category of expanded benefits and increased value. These benefits may cover dozens of different health screening tests, such as a colonoscopy, mammogram or BRCA genetic test that identifies breast cancer risk.
WHAT TO LOOK FOR IN A CRITICAL ILLNESS PLAN
“The coronavirus crisis has shed new light on the value of critical illness coverage”
There’s a tremendous amount of variety in the critical illness market. In addition to coverage for COVID-19 and a wide variety of other conditions, here are some features to look for to ensure you bring your clients the greatest value:
- Customization and choice. The newer critical illness plans provide many options to tailor coverage. Your clients should expect a choice of several different plan designs with different features. For example, they may want a plan that includes more cancer coverage to offer a combined benefit to employees. On the other hand, if they already offer a cancer plan, they may prefer a critical illness design with less emphasis on cancer benefits.
- Personalization to meet individual Employees should be able to choose from different levels of coverage to meet their financial and family situations, including spouse and child protection. They also may want to further personalize their coverage with riders that pay additional benefits for first diagnosis, heart procedures or progressive diseases such as Alzheimer’s disease.
- Guaranteed issue with no health questions. This ensures all employees, spouses and eligible dependent children have access to coverage and increases participation.
- HSA-compatible. This allows employers to provide coverage that can be used alongside employees’ health savings accounts
- Breast cancer coverage at 100% This benefit should apply to both invasive and noninvasive cancers.
- Access to mobile apps and online Easy-to-use technology helps employees track symptoms, treatment plans and appointments and find resources for transportation, financial assistance, and emotional support while dealing with cancer.
The coronavirus crisis has shed new light on the value of critical illness coverage. Educate your clients on the importance of critical illness insurance as an affordable option that can help employees better protect themselves and their families from the unexpected.
TODD V. MASON is a Southwest Region Territory sales leader for Colonial Life & Accident Insurance Company based in Long Beach. Contact him at TVMason@ ColonialLife.com.