This policy, which has a lower premium than individual disability insurance and is ideal for spouses with high-wage earners, allows the insured to receive a lumpsum benefit that can be used as needed, without strings attached.
You are more educated than most if you have ever heard of Critical Illness. It is a valuable tool to have in your arsenal if you want to provide asset protection for a wide range of clients. This coverage is a huge difference, as many producers do not offer it.
You’ll find all the information you need to help clients and increase your income by including Critical Illness in your product line.
What is Critical Injuries insurance?
Insurance for critical illness provides financial protection in the event of a serious illness that renders a person unable to work or earn a living. This insurance covers medical expenses that are not typically covered by other insurance policies. It is paid in lump sums and allows clients to use the money wherever they are most needed, from medical bills to mortgage payments.
This coverage is necessary because traditional insurance policies leave consumers with more gaps. Individuals may be liable for large medical bills due to high deductibles, coinsurance, and limited coverage for non-traditional treatments.
The insurance pays for expenses incurred as a result of a long-term recovery from a critical illness. The policy does not cover every medical bill. Instead, it provides a payment that can go towards any condition on the policy.
For whom is Critical Illness insurance most appropriate?
This coverage is ideal for:
* Spouses of high-wage earners – If a doctor, lawyer, or executive is forced to take time off work to care for their spouse, it can cause business problems. The spouse’s critical illness coverage means that the family can hire in-home care, a babysitter, or any other services to maintain the home’s smooth operation.
* Clients who are self-employed and high-wage earners who have reached their DI limits.
* Many people in high-risk occupations are not eligible for disability insurance. These occupations, such as firefighters, long haul truck drivers, or police officers, may be eligible for critical illness insurance.
* Anybody who worries about not being able to pay for critical illness costs that are not covered by traditional insurance.
Critical Illness insurance is sold either in lieu of DI or as an addition to DI.
Sometimes referred to as “income substitution” insurance, disability insurance provides a monthly payment in the event that a person is disabled and cannot work. DI policies provide a monthly income for the insured during an incapacity to work period. DI benefits generally limit to a portion of an insured’s regular income. They cease once the disabled person becomes able to work or no longer meets the criteria for disability. Many disability policies have a waiting period after the onset of disability. Disabilities benefits can also be affected by income other than critical illness benefits.
Critical Illness insurance is different from DI because it covers costs associated with recovery from major diseases. When a qualifying event occurs, these policies pay a fixed amount to the beneficiary or insured. The full policy benefit of critical illness insurance is paid in one lump sum upon diagnosis. Insurance brokers can sell both types of coverage because each policy has different protections. It is often advantageous to combine the products for optimal protection.
What are the main selling points and benefits of Critical Injuries insurance?
The coverage features for each product are different so be sure to familiarize yourself with the product. The following are the key coverage features of most policies:
* Paid expenses: The long-term recovery process from an illness can often include unexpected costs. The Critical Illness Insurance fills in the gaps to ensure that a person does not become overwhelmed by medical bills.
* Guaranteed Renewable: Clients have peace of mind knowing that they can renew their Critical Illness policy as long as premiums are paid on-time.
* Lump sum Benefit: The insured receives a lump-sum benefit if he is diagnosed with any of the conditions covered. The insured can then use this payment for any condition listed on his policy. The insured can do whatever he likes with the benefit. The money could be used to pay his medical bills, pay his mortgage, or for utilities. The insured could also use the lump sum payment to pay for alternative healthcare or hire a health worker.
* Client Benefits: The insured receives his Critical Illness insurance directly. This insurance covers him for all of his other insurance policies. The client has control over how the funds are used. This coverage bridges the gap between traditional health insurance policies and actual expenses.
* Flexible Coverage Options: Clients can have their policy paid off in as little as 20 years. In other cases, premiums will be refunded after 15 years. This gives them the flexibility they want.
* Comprehensive Coverage: While coverage can vary from one company to the next, common illnesses and diseases that are covered by Critical Illness insurance include: ALS, other motor neuron diseases; Alzheimer’s Disease, benign brain Tumor, blindness, cancer and heart attack.
What statistics and facts can I use to impress prospects?
These facts are convincing. These statistics will help you explain the need to your prospects:
* It is expected that approximately 1.2 million Americans will experience their first or second heart attack in 2010. About 62 percent of those who survive will be saved.
* A stroke occurs on average every 40 seconds in the United States. Strokes are the leading cause of long-term, severe disability in the United States.
* Five-year survival rates for all types of cancer in the United States are just 66%.
According to a Harvard University study and the Robert Wood Johnson Foundation, more than 60% of U.S. personal bankruptcies are due to rising medical bills. Additionally, over 75 percent of these bankrupt family members were middle-class families who had health insurance and were still burdened by medical debt.
According to an American Cancer Society and Kaiser Family Foundation 2008 study, 20% of people with health insurance can’t afford treatment for cancer. According to the survey, $1 million was required for treatment of blood cancers such as leukemia in 2008. This is more than most insurance policies allow.
What questions can I ask prospective candidates to find out if they are good candidates?
These questions will help you determine whether a prospect should have Critical Illness coverage.
* What occupation are you? You should look for high-risk jobs or chances of DI ineligibility.
* What would happen to your family and business if your spouse becomes seriously ill? You should emphasize the benefits of immediate cash benefits.
* Are you able to budget and save money each month to pay for long-term care? Are you able to save enough money for this event? Not only will you have to pay for your daily expenses, but medical bills can also add up and ruin a financially stable family. Tell the prospect that a year of nursing home services costs $50,000 or more. A part-time aide can cost as high as $10,000 per annum.
Why would I want to add Critical Illness?
Due to rising medical costs, longer life expectancies, and gaps in traditional insurance coverage, critical illness insurance is an important element of a person’s financial protection.
Individuals may be liable for large medical expenses that are not covered by traditional insurance due to high deductibles and coinsurance. The chance of selling resistance is lower because critical illness premiums may be lower than those for LTCI.
Many prospects have experienced illness, including stroke, cancer, or heart attack. Prospects have witnessed the impact on their extended families, as well as the financial stress and medical bills. Ask your clients if a $50,000 lump sum would have helped to reduce stress and alleviate the worries of their family. The family can focus on healing and not worrying about how to keep their finances afloat without the burden of mounting bills.
What is the potential market? Are you in a growing market for this product?
There is plenty of opportunity to prosper and grow in Critical Illness insurance, which was an underserved market in years past. This policy could help you increase your income significantly. You can also offer coverage to existing clients by adding the policy.
The market isn’t saturated because the coverage is relatively new in the U.S. You should consider Critical Illness insurance as an additional tool in your arsenal. Disability insurance has many coverage limits and terms.
Americans are becoming more healthy as they live longer. However, modern medicine has made it possible for most people to recover and live with their illness. But, their financial situation might be different if they don’t have Critical Illness insurance.
How do I package Critical Illness insurance coverage?
There are many ways to sell Critical Illness insurance. You can offer it as an individual policy or through an employer-paid plan as a supplement or replacement to an existing or new health insurance policy.
You can also bundle Critical Illness insurance into different coverage categories. Claims can be made in more then one category. Prevalent illnesses such as heart disease or cancer would make up the largest category. Clients can choose to purchase a policy that only covers one condition or a policy that covers more.
What’s the bottom line? The time is now! Before the crisis, offer Critical Illness insurance.
While no one enjoys pondering about their mortality, they like to imagine a better future, one that is peaceful, happy, and free from the pain of losing it all. If financial protection isn’t in place, dreams can be crushed by a crisis such as a long-term or short-term major illness. Income protection policies are one way to make your dreams come true. The Critical Illness policy is one that covers the gaps left by other policies. These policies are simple to use and accessible for everyone. Get Critical Illness insurance now and help your clients secure their financial futures.
