Critical Illness Insurance Market

Critical illness insurance is a type of insurance in which the insurer comes in a contract to make a lump sum cash payment if the policyholder is diagnosed with some specific disease on a predetermined list as a part of the insurance policy. Critical illness insurance is also known as critical insurance cover.

The increasing cases of critical illnesses and increasing out-of-pocket expenditure for the insured and uninsured population are expected to drive the growth of the global critical illness insurance market. However, lack of awareness about critical illness insurance is expected to hamper the growth of the market.

Critical illness means any illness, disease, or health condition that is life-threatening and needs comprehensive care and continuous monitoring, often in intensive care. The global critical illness insurance market is expected to witness a profitable growth owing to the rise in the number of critical illness cases such as cancer, stroke, heart attack, and renal failure, among others.

Cancer has a major impact on society across the world. According to the National Cancer Institute, an estimated 1,735,350 new cases of cancer were diagnosed in the US and 609,640 people died from the disease in 2018. Moreover, according to the Cancer Research UK, there were approximately 8.8 million (52%) new cancer cases in males and 8.2 million (48%) new cancer cases in females in 2018, globally.

In addition to this, stroke is the third leading cause of death in the US. According to the Internet Stroke Center, more than 140,000 people die each year from stroke in the US. Furthermore, as per the Centers for Disease Control and Prevention (CDC), about 805,000 Americans have a heart attack each year.

The care and treatment plans of these critical diseases are expensive. For instance, an estimated national expenditure for cancer care in the US in 2017 was USD 147.3 billion. Without comprehensive health insurance coverage, patients’ OUT-OF-POCKET costs would be higher, and millions would be unable to afford the care they need. Critical illness insurance can protect patients financially. Thus, rising cases of life-threatening diseases along with their higher treatment cost is increasing the adoption of critical illness insurance, which in turn, is expected to drive the growth of this market.

The critical illness (CI) insurance plan provides coverage for critical illnesses that require treatment over a long period. With rapid progress in the detection of diseases, more people are diagnosed often than earlier. The introduction of genetic testing allows the early diagnosis of minor diseases. With this, the definitions used in CI contracts are weakened.

The CI ‘s concept to provide financial support only when life is threatened by severe disease is reduced. This creates pricing uncertainty and is challenging the current critical illness cover conditions. Tiered and reviewable critical illness insurance products play to this scenario exceptionally well. Ultimately though, these medical advances question the long-term viability of guaranteed critical illness products in their current form. However, the new therapeutics and the increased role of genomics in day-to-day medicine is likely to create opportunities for insurers and allow them to tailor services according to patients’ needs. This could prompt the third generation of CI products that sees insurers shift from providing broad compensation for individual health circumstances. This will also lead to the growth in enrollment in insurance plans in the coming years.