A.M. Best Special Report: Critical Illness Insurance Gains Momentum As Marketplace Evolves

Nearly three decades after its inception, critical illness insurance is now sold in more than 50 countries and by an increasing number of insurers. Early policies covered three major disease types: cancer, heart attack and stroke. Today, as the employee benefits marketplace continues to grow and evolve, the value of critical illness’s benefits has become increasingly clear, making it a core offering as both an employer-paid and a voluntary product, according to a new report from A.M. Best.

The A.M. Best Special Report, titled “Critical Illness Insurance Gains Momentum As Marketplace Evolves,” notes that companies have begun to see more value in devoting greater resources to sales training for critical illness, as the product clearly can offer distinct and supplementary benefits to many other types of coverage.

Viewed as a moderate to low risk supplementary product by A.M. Best, critical illness insurance provides further product and revenue diversification for carriers. While typically not a core product to most insurers, supplemental health-type products can be marketed to existing policyholders, improving persistency. Critical illness can be viewed as a favorable component of certain product portfolios where it has potential to decrease overall product expenses and may boost revenues and the ultimate profitability of the company as a whole. Losses are typically not substantial because of the lower face amounts, leading to the possibility of more opportunity than risk if the product is approached appropriately.

For the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=232938.

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