Why Should Brokers Be Selling Critical Illness Insurance?


Cardiovascular disease affects 92.1 million Americans, and 735,000 people in the U.S. have heart attacks each year. The risks are real. The good news is that awareness of the value of critical illness insurance is growing. Sales of policies grew 17 percent from 2015 to 2016, and 23 percent of small businesses currently offer it as a voluntary benefit. That’s why now is a good time for brokers to focus on selling critical illness insurance.

Here are some things you need to know to help you be successful year-round.

What Does Critical Illness Insurance Cover?

Critical illness policies can cover conditions such as cancer, kidney failure, advanced Alzheimer’s, and major organ transplants, but cardiovascular problems are the heart of this important ancillary offering.

As a broker, if you sometimes wonder if selling critical illness insurance is important, remember: Not only does heart disease continue to be the leading cause of death in the U.S., but heart attacks and coronary heart disease are two of the most expensive hospital diagnoses.

Most critical illness insurance policies cover some portion of other cardiovascular conditions in addition to heart attacks, such as coronary bypass. And did you know that heart disease can cause strokes? Critical illness insurance covers that too.

Critical Illness Coverage Could Bridge Savings Gap

With the rise of companies offering high-deductible plans, out-of-pocket costs for employees are skyrocketing. In fact, over the last five years, the number of workers with deductibles of at least $1,000 has risen by 17 percent.

With the out-of-pocket burden falling more heavily on employees, savings accounts should become an important backup. But Americans aren’t particularly good at saving. The average health savings account (HSA) balance is about $2,500, and the median savings account balance is $5,200.

In the event of a health crisis, those amounts are far from adequate. Deductibles for 2018 Marketplace plans can be as high as $7,350 for individuals. Deductibles for employees of small businesses average about $2,000. And that’s just for direct costs such as copays.

When you’re selling critical illness insurance, a couple of key questions can quickly emphasize the financial importance of having this coverage. Ask your clients:

  • How much money would you need to cover your expenses for three months?
  • How would you pay the bills for expenses in the event of a heart attack, stroke, or other condition?

With policy benefits starting at $10,000 and going up to $100,000 (or more in some cases), your clients can easily see the significance of how much a lump-sum payment could help during a crisis.

Lump-Sum Cash Benefit Helps Make Ends Meet

One of the best and easiest points to make when selling critical illness insurance is that the lump-sum cash benefit can be used for anything the beneficiary wants.
A lump-sum payment can help pay expenses such as transportation costs to and from treatment centers, bills from out-of-network providers, prescription costs, hotel stays, or even experimental treatments that health insurance doesn’t cover. Or it can cover day-to-day necessities like the mortgage or rent, groceries, utility bills, and car payments.

Take the Hard Facts to Heart

It’s the indirect costs—such as mortgage, car payments, and utility bills—that can be the hardest on finances during a critical illness. This is why your clients need to know about the kind of financial protection a critical illness plan could provide.

  • Indirect costs for cardiovascular disease in the U.S. are currently $237 billion and are projected to be $368 billion by 2035.
  • Individual out-of-pocket costs for a critical illness can be more than $14,000.
  • The average loss of income due to critical illness is more than $50,000.

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How to Ease Common Client Concerns

Critical illness insurance has only been around since the mid-1980s, and it’s still a new concept for many people. Here are some ways to address four typical objections you may hear in your client discussions.

  1. “It’s too expensive.” Critical illness insurance costs more than life insurance because you’re more likely to actually use it. (One in 14 people let their term-life policies lapse each year, according to the Life Insurance and Market Research Association. That’s a lot of death benefits companies won’t have to pay.) How valuable is a lump-sum payment in a time of need?
  2. “I’m healthy; I don’t need it.” When you’re healthy is the time to buy, before it’s too late. We don’t plan on getting a critical illness and never know when it may strike. Because you’re healthy, there’s a good chance you would be in a better position to survive an illness and have to pay the expenses that go along with it.
  3. “If it’s important, why haven’t I heard about it before?” Critical illness insurance has only been available for about 30 years. Prior generations didn’t need it because fewer people survived the diagnosis. Due to advances in medicine, more people live after a heart attack, cancer, or stroke diagnosis. The coverage helps remove the financial stress and lets you and your family focus on recovery.
  4. “I’m not ready yet.” If your health changes, there’s a strong possibility you’ll no longer be eligible. If the health of a close family member changes, that may also impact your eligibility. Plus, the younger you are when you purchase a policy, the lower the premiums will be.

Talk About Bundling Related Ancillary Products

Selling critical illness insurance could be just the beginning of a new sale. Educate your clients about other ancillary products that help could help them cover costs that health insurance doesn’t.

Because not all heart conditions are covered by critical illness insurance, it’s a good time to discuss the benefits of disability, hospital confinement, and long-term care insurance. Using cardiovascular conditions as an example can help clarify how the different supplemental products work separately and together to protect finances.

When it comes to voluntary benefits, many employers may only think of dental and vision insurance rather than critical illness insurance or other ancillary products. But with employee out-of-pocket costs rising, make sure your clients know that critical illness coverage may mean more to their workforce than ever.

How Excelsior Can Help Brokers

Are you ready for more success with your sales? Excelsior can help you cross-sell medical and ancillary products to your clients so they can have the protection of a more robust benefits package. We also provide comprehensive sales support and multi-carrier, multi-line quoting technology. Engage with Excelsior today!

 

Sources: https://healthmetrics.heart.org/wp-content/uploads/2017/06/Heart-Disease-and-Stroke-Statistics-2017-ucm_491265.pdf | https://www.cdc.gov/heartdisease/facts.htm | https://www.kff.org/report-section/ehbs-2017-summary-of-findings/ | https://www.ebri.org/pdf/briefspdf/EBRI_IB_434_HSAs.11July17.pdf | http://www.businessinsider.com/how-much-the-average-american-has-in-their-savings-account-2018-2 | https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/ | http://www.criticalillnessinsuranceinfo.org/learning-center/individuals.php | https://healthmetrics.heart.org/wp-content/uploads/2017/10/Cardiovascular-Disease-A-Costly-Burden.pdf | http://www.whymetlife.com/boi/downloads/MetLife_Accident_Critical_Illness_Whitepaper_Infographic.pdf | https://www.verywell.com/heart-disease-that-leads-to-stroke-4083060 | http://www.genre.com/aboutus/press-releases/us-critical-illness-market-survey-results-show-positive-sales-growth.html | http://www.surebridgeinsurance.com/critical-illness-insurance | https://www.marketwatch.com/story/10-things-life-insurers-wont-tell-you-1308333194735#false

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