Critical Illness insurance is not often thought of by benefits brokers as an option to offer as part of their sales toolbox, because they simply do not know enough about how it benefits both their bottom line and their clients respectively. Through Critical Illness insurance, brokers will be able to offer their clients financial protection if/when a tragic health-related event occurs when a traditional health care plan isn’t enough.
What is Critical Illness Insurance?
Critical Illness Insurance, also known as Critical Care Insurance or Critical Illness coverage is meant to act as a deterrent to financial ruin if an employee becomes suddenly sick with a serious illness.
As a normal health insurance plan may cover some health care costs due to a sudden Critical Illness, it doesn’t cover the challenges of paying for the everyday living expenses a typical person has when they’re sidelined from working.
Critical Illness can hit anyone at any time. The benefits of offering Critical Illness Insurance may just save an employee and/or their family from facing a large financial burden and uncertainty when times are at their toughest.
5 reasons why benefits brokers should offer Critical Illness Insurance
1. Lump-sum cash fund paid-in-full when Critical Illness strikes
For benefits brokers, this should be the number one talking point when selling Critical Illness insurance plans to employers as part of their overall benefits offerings.
A lump-sum payment—Coverage amount varies per plan—from Critical Illness coverage can help cover expenses that are medical and non-medical. A person with this coverage can use it to pay for:
- Prescription costs
- Transportation to-and-from treatment locations
- bills from out-of-network providers
- Mortgage or rent
- Utility bills
- Car payments
According to Excelsior Insurance, the indirect costs such as mortgage, car payments and utility bills can become some of the more burdensome bills to keep on top of when Critical Illness strikes. The following stats would be good for benefits brokers to share with their clients as reasons to offer Critical Illness insurance as part of their health care benefits packages.
- 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.
2. Critical Illness insurance is becoming more-and-more popular each year
According to Guardian Life, Group Critical Illness insurance is now offered as a voluntary benefit by 35 percent of mid to large-sized companies because it’s an affordable way for employers to help confront medical costs and strengthen their benefits packages without raising the expenses.
As many employers are searching for ways to balance the costs of complying with the laws authorized by the Affordable Care Act (ACA), many are turning to their benefits brokers for solutions such as Critical Illness coverage to help navigate them.
With the addition of Critical Illness insurance their sales portfolio, benefits brokers will be able to add new opportunities to develop and cultivate relationships with their current and prospective clients that will lead into another avenue income for them.
3. Critical Illness insurance will help your clients attract and retain talent
According to a 2014 study from the Employee Benefit Research Institute, 75 percent of all workers say that the benefit offerings a potential employer offers are an important factor when deciding if they’ll accept a job offer or not. Most workers see the advantages of voluntary benefits, such as Critical Illness insurance.
As premiums and other out-of-pocket expenses rise each year, employers are looking for alternative health care option to help negate those effects on their employee base. Voluntary health care plans such as critical illness insurance helps to deter those costs.
4. Critical Illness insurance will cover over 30 diseases
As traditional health care plans will not fully cover the costs if someone becomes deeply sick, Critical Illness insurance will cover the following:
- Heart attack
- Coronary artery bypass graft
- Renal failure
- Major organ transplant
- Life-threatening cancer
- Loss of hearing
- Loss of vision
- Loss of speech
For a full list of what Critical Illness insurance covers, please click here.
5. Selling Critical Illness insurance increases the bottom line for benefits brokers
According to a 2015 Benefits Pro article, the return on investment is very appealing. The typical Critical Illness policy carries a $2,200 premium, with a 70 percent first-year commission and 4 percent renewal commissions paid to the writing agent.
Benefits Brokers looking for an easy way to calculate premiums can check out the calculator created by RBC Insurance for Critical Illness Insurance. Brokers can help their clients calculate how much money would be needed to survive for three, six, nine and/or 12-months with a Critical Illness plan applied.