Also in this issue:
Group Company Myopia
Employer Attitudes toward Voluntary during the Recession
Tough Economy? It’s Conservation Time
The Product that was Supposed to Have Died!
Are We in the Voluntary Business or the Benefits Business?
Economic Lessons
Managing the Budget in Uncertain Times
Who Will Serve the Micro Group Market?
Return of Premium Term – Implications of a New Actuarial Guideline
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Spring 2009/ No. 79
The Product that was Supposed to Have Died!
What happened to cancer coverage? Ten years ago many said that cancer sales were likely to diminish to practically nothing as “everyone” would switch over to critical illness. But here we are in 2009, and cancer sales have not gone away. In fact, cancer sales outnumber critical illness by as much as four to one (based on new business annualized premium for the industry). In a recent study of cancer products, we asked carriers about the whole cancer versus critical illness question.
All but two of the carriers surveyed offer both cancer and critical illness products. And all of these carriers agree that they need to provide both products going forward. The reasons, say the carriers, is that the market and producers (primarily) demand both products. Indeed, many producers who have always sold cancer plans continue to do so. They may also sell critical illness so about half of the carriers offer critical illness products both with or without cancer. Some even offer a cancer-only option.
Among carriers that offer both plans, not surprisingly, more said they sell more cancer than critical illness. They believe this is because the product line is more mature and the benefits (for cancer) are more comprehensive. On the other hand, those selling more critical illness said that is because the market sees the financial risk that can result from any critical illness event and the product is not just limited to cancer.
The debate is likely to continue for years but will be decided by producers. As long as producers demand cancer products, carriers will offer them. Today, many group carriers are looking at the possibility of cancer insurance. In addition, we seem to be getting past the days where people believe that cancer insurance is sold to individuals in lieu of medical insurance. Producers and carriers alike position cancer insurance as helping pay for out-of-pocket expenses—both medical and non-medical—that are not covered by medical insurance. This improves the credibility of the product and helps position it more effectively.
The spotlight report, Worksite Cancer Products 2009, helps carriers see how their cancer product “stacks up” to the competition. For more information on the report, give us a call or go to our website.
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