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The Marketplace for Critical Illness Coverage Presented by : Jerry Jacobs, CLU 5416 Yale Street Metairie, Louisiana 70003 Ph#(504)888-2242 Fax#(504)889-1753 8301 Delmar, #2W St. Louis, Missouri 63124 Ph#314-997-0751 Cell(504)237-8710 Email: jerry_in_metairie@msn.comjerry_in_metairie@msn.com
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AGENDA Introduction What is Critical Illness Insurance? U.S. Marketplace Trends Need for Critical Illness Protection Product Design Marketing Applications Global Perspective U.S. Critical Illness Marketplace Q&A/Discussion – Open Forum – Issues/Concerns
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Approximately 1.5 million Americans suffer a heart attack each year. Of these, 1.1 million survive at least three (3) years. Over 40% of the population will develop breast, prostate, or some form of cancer at some point in their lives. The probability of surviving a critical illness before age 65 is almost twice as great as dying. Source: 1987 Employee Benefits News And Views Magazine FACTS
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What Is Critical Illness Insurance? Critical illness insurance (C.I.I.) has characteristics of both life insurance and health insurance. C.I.I. pays a life insurance-type lump sum benefit, upon diagnosis of one of a number of critical illnesses rather than upon death.
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C.I.I. Coverage C.I.I. will pay a lump sum benefit after the insured is diagnosed with a critical illness. Virtually all products cover the “Big Three”: Heart Attack Stroke Life Threatening Cancer Nearly 70% of all deaths under age 75 are associated with heart disease, stroke and cancer.
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The “Big Three” Heart Attack Death of a portion of the heart muscle(myocardium) from a blockage of one or more coronary arteries. Stroke Any acute cerebrovascular accident producing permanent neurological impairment resulting in at least thirty (30) days of paralysis or other measurable neurological deficit.
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The “Big Three” Life Threatening Cancer Only those types of cancer shown by the presence of a malignancy identified by the uncontrolled growth and spread of malignant cells and the invasion of tissue that could result in death.
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World Growth Concept developed by Marius Barnard Introduced South Africa in 1980s United Kingdom Japan Continental Europe Australia Canada Ireland United States
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U.S. Marketplace Trends Medical technology is keeping people alive longer The concern today is not dying too soon – it’s living long
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People Living Longer 65 year old male can expect to live to age 83 65 year old female can expect to live to age 87
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Attitudinal Trends Consumers have greater fears than premature death, such as: The cost of health care Cost of nursing homes Having enough income to retire
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LIFE INSURANCE INDUSTRY TRENDS Demographics favor living benefits over death benefits THE RESULT: Individual life sales have declined 30% over the past ten (10) years. Source: Marketing Edit LIMRA 1997
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Why C.I. Coverage? Probability of surviving C.I. before age 65 is almost twice that of dying Costs associated with C.I. are not covered by traditional insurance
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Why C.I. Coverage? EXAMPLE: Two-thirds of all cancer-related costs are indirect, non-medical expenses, such as: Lost income for C.I. Survivor Lost income and work time for spouse or care giver Housekeeping and child care expenses Home health care needs Home or car modifications Non-covered experimental treatments Expenses not covered by insurance (including co-payments and deductibles)
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If you survive a critical illness, what will you do? Disability Insurance – pays a percentage of the sufferer’s monthly income and benefits are dependent upon ability to work. Long Term Care – limited to a daily benefit available subject to a hospital stay or home nursing requirements. Accumulation Products – intended to provide supplemental retirement income.
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If you survive a critical illness, what will you do? Disability Insurance – pays a percentage of the sufferer’s monthly income and benefits are dependent upon ability to work. Long Term Care – limited to a daily benefit available subject to a hospital stay or home nursing requirements. Accumulation Products – intended to provide supplemental retirement income.
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Critical Illness Insurance Insured has options The money provided by the C.I.I. empowers the insured to exercise choice. C.I.I. is a consumerist product
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Family/Individual Perspective Replace reduced earnings Pay off personal debts Cash for medical treatment or associated expenses Education or Retirement
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Business Perspective Buy/Sell Agreements Provide ill shareholder with benefit Enable working shareholders to buy out ill shareholder Key Person Pay off creditors Executive perquisite Recruit replacement with similar talent
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C.I.I. Product Critical Illness Insurance is Flexible Life Health Disability Other products
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Open Forum – Issues/Concerns
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