But the simple option can get clients what they need.
“One of the things I strongly suggest, critical illness can be sold in two or even three stages,” says Tim Landry, from QTR Solutions. “You get guaranteed issue CI, easier issue where they cover a limited number of conditions, and then you get the full.”
Many advisors seem to have cut their losses on critical illness with declines and high prices leading consumers to shun the product.
For example, if a client has a family history of multiple sclerosis, it’s extremely unlikely they’ll qualify for traditional issue CI.
“But I’m not going to have a problem getting CI that doesn’t cover MS,” says Landry. “Remember, the four conditions that easy issue CI covers is 80% of the claims; it’s cancer, heart attack, stroke and sometimes coronary artery bypass. Then once you’ve got that, then try and get the major ones.”
And advisors are going to have to accept ratings are the nature of the beast with critical illness.
“To me if you have a rating, you have to reduce your coverage so it fits what you can pay,” he says. “Ratings, yeah they happen and you should be able to live with those. All they’re really saying is you’re fully covered and here’s a fair price for it.”
The problem is that it sometimes requires a decoder to understand what insurance companies are saying. That poor communication has trickled down to carrier’s marketing efforts around CI, leading to a confused client base and many uneducated advisors.
“The insurance companies have to learn how to market these products,” said Landry. “They don’t know how. They honestly don’t know how. I think what they should do is sit down with the people who understand it and find out what they need to do to get these products off the ground.”
Advisors looking to get the very best critical illness coverage for their clients have been frustrated by high prices, underwriting issues and many outright declines.