Why CI Insurance Hasnt Replaced Cancer Insurance

Consumers: From a consumer standpoint, the barrier is lack of knowledge about the product and the needs that it can solve.

Simply put, the consumers–and even the benefits managers–aren't asking for a CI product because many don't know that one exists. They are uneducated about the product, and when asked about CI coverage, they often see other product types (long term disability, long term care and intensive care benefits) as the "same" type of coverage.

Yet, when the traditional CI plan is explained to consumers and benefit managers–including how the product can be used to solve the financial problems caused by surviving a critical illness–they like the concept. Understandably, much more consumer education is needed.

Carriers: Finally, insurance carriers also are hindering CI sales.

In a recent survey we conducted, insurance carriers often expressed the desire to replace cancer products with CI products primarily because of the better predictability of claims. Carriers also believe CI insurance is probably a better product for the consumer since it covers more than one condition.

But carriers who already are offering cancer products don't feel they can eliminate their cancer plans because their broker/producers often aren't willing to sell CI instead of cancer. In fact, several companies that tried to eliminate their traditional cancer products encountered serious field objections.

In addition, carriers often don't want to cannibalize their cancer block (or encourage their brokers to do so).

So, what will it take for CI sales to exceed or even replace cancer? We believe it is up to the carriers.

CI insurance is probably a better product for most consumers, so carriers need to lead the charge and push in that direction. This means thinking beyond tomorrow's sale (of cancer insurance) and aggressively attacking the problems of uneducated brokers and consumers.

More training is needed for producers–training that goes beyond the product features and benefits or underwriting guidelines. Producers need to understand the needs addressed by CI insurance, where the product fits in with an employer or employee's benefit program, and, for some, why CI insurance is a viable and inevitable alternative to cancer insurance.

Carriers also need to provide producers with the marketing support they need to educate benefit managers and employees on the product. Despite the early promotional activities of a few carriers, most benefit managers and employees still aren't aware of CI coverage and the role it can play in ensuring a family's financial security.

In summary, CI insurance will not replace cancer until: 1) cancer carriers replace cancer with CI insurance in their portfolios, and 2) the voluntary and worksite carriers that don't offer cancer accept the value of adding CI insurance to their portfolios.

Once the old cancer insurers have noteworthy success with CI insurance, other carriers, including the "non-cancer" companies, will join the party.

Gil Lowerre is president of Eastbridge Consulting Group, Inc., a worksite marketing and voluntary benefits consulting firm, Avon, Conn. Bonnie Brazzell is vice president at Eastbridge, in the Columbia, S.C., office. Their e-mail addresses are, respectively, [email protected] and [email protected]. The data shown here is based on their research with employers, employees and producers.

CI insurance is probably better for most consumers than cancer insurance, so carriers need to lead the charge and push in that direction