Developments of Critical Illness Cover Sales in the Usa and Canada

The US market, on a whole had been slow to adapt with critical illness insurance. While in the UK critical illness cover is one among the most famous insurance policies, in the US it may be a completely different thing. On the other hand, most critical illness cover sales in the UK might have come from accelerated policies. In the US, most critical illness cover sales may turn out to be standalone critical illness policies. There may be two reasons to explain this fact. Firstly, the way the product is marketed may not be the same in both US and UK. Secondly, there may be a larger health market in the USA. Hence, a greater amount of time may be involved for critical illness policy to be known by many people.

Moreover, according to research carried out by Lotter Actuarial Partners Inc. worksite marketing may show more potential on a short time basis actually. There may be several opportunities concerning critical illness insurance as both rider and standalone. More precisely, the rider benefits may be aimed at the ‘blue collar market’ whilst the standalone critical illness policy may be pointed to the ‘white collar market’ where there may be already life cover. For critical illness cover to make a good success in the US market, a big company might need to develop a new design for this product. There had been certain indications that critical illness sales may accelerate. While the timescale is still unknown, the product is predicted to succeed in the US market.

Furthermore, critical illness insurance can be considered as a recent insurance policy in Canada as it was firstly introduced in the year 1993. According to Munich Re, 2000, the adoption of critical illness cover in the Canadian market had been a relatively slow one. The insurance industry had expected a more rapid growth of critical illness insurance. Gradually, more and more companies had started to step into the market, with approximately 20 to count nowadays. This number is expected to increase during the coming years. On the other side, banks may be also starting to make their presence felt in the insurance market as they had started to offer critical illness cover on mortgages and loans.

As per Munich Re, 2000, more than 40 percent of critical illness policies in force could have been purchased in the year 1999. In the year 2000, there may have been around 15,000 critical illness policies in force. In the year 1998 there may have been around 8,500 policies which may have amounted in premiums summing up to Canadian dollar 8 million to 9 million. As a matter of fact, the sales related to critical illness insurance made in the year 1998 could have been twice as that made between 1993 to 1997. The trend is expected to continue as more and more companies are getting into the insurance market with the aim of providing critical illness cover. Thus, its importance may be growing rapidly in the Canadian market. Probably the most supportive reasons why people may have chosen critical illness cover can be due to its ageing population and expensive healthcare costs.

Critical illness insurance had been adopted quicker in Canada than in the US. Though critical illness insurance may be considered new in Canada, its sales may have been greater than in the US. This may however depend on how the product had been marketed.