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Policy Matters

Second Quarter 2021


Your clients probably know someone who has had a heart attack, stroke, or cancer (or had it themselves). But they probably don’t know about critical illness (CI) insurance (aka critical care insurance), a little-known income replacement solution similar to Disability insurance (DI).

And your clients probably realize the value of life insurance: Financial security for their loved ones. But do they understand the impacts on their savings after recovering from a critical illness?

  • The increase in older population means an increase in incidence and prevalence of chronic conditions
  • What were once progressive illnesses and deaths have been replaced by massive increased survival rates
  • Today more than 90% of people survive heart attacks (up from 50% a few decades ago)1
  • Cancer death rates among Americans 45-64 have declined from 24.7% in 1999 to 19.5% in men; 20.4% to 16.6% in women (1999-2018)2
  • 6 in 10 U.S. adults have a chronic disease3
  • 4 in 10 U.S. adults have two or more3

Fun fact: Critical illness insurance was invented by a South African surgeon who noticed that, thanks to medical advancements, his patients were recovering from major illnesses but then suffering from the financial impacts of that survival.

Here’s a look at how heart disease, cancer, and stroke deaths have declined from 2000-2015:

And the prevalence of treated chronic diseases from 2003-2015:

Two of the biggest benefits of CI are: The money is paid in a lump sum (that may be income tax-free) directly to the insured person and can be used for anything: your medical care, lost wages, extra time off work, travel for treatment, health policy’s coinsurance and deductibles (which seem to be increasing exponentially), experimental treatments, home modifications, mortgage, utilities, and even food; and the insured can get separate payouts for multiple conditions.

And, while teamLLIS recommends riders sparingly, CI offers some riders that are both unique and favorable:

  • Extend coverage to spouse or children
  • Get coverage for additional critical illnesses
  • Return of premium (if your client dies from something other than a covered illness, a portion of premiums paid is repaid to loved ones)

Where CI differs from DI is in who it covers. Some occupations are hard to insure with DI, but ideal candidates for CI:

  • Homemakers
  • Home-based business owners
  • Professional athletes
  • Offshore oil and gas workers
  • Packing industry workers
  • Writers/actors
  • Pilots and flight attendants
  • Air traffic controllers

Coverage is both affordable and flexible and is attractive to your clients who may be:

  • Maxed out on DI*
  • Ineligible for DI coverage/not available to them
  • Erratic income earners
  • Retirees
  • Self-employed
  • Stay-at-home parents (or other non-income generators)

*Critical illness insurance offers an additional layer of protection for people with DI through their employer (which is capped at 60% of salary and doesn’t take into account bonuses and commissions). Since government employees’ DI coverage is based on government limitations, CI is a great tool for them to amp up the benefits to help them live life as close to pre-illness as possible.

You can read more about critical illness insurance here and by reaching out to our CI specialist Kathy Bilodeau.

1 Harvard Health

2 National Vital Statistics System, Mortality Data,



Term Life Insurance | Low-Load Universal Life (Individual & Survivorship) | No Lapse Guaranteed Univeral Life (Individual & Survivorship) | Long Term Care Insurance | Disability Insurance | Critical Care Insurance | Low-Load Variable Annuity | Immediate and Fixed Annuities | Low-Load Variable Universal Life | Hybrid Life/LTCi | Hybrid Annuity/LTCi

(We recommend low-load permanent life insurance and annuities when possible)

(Not all policy types available in all states)

For a list of current providers, visit the Advisor Tools section of our website and click on "Insurance Companies We Work With".

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