Critical Push

Critical Care, the Insurance Industry’s Latest Push | WSJ | 7.18.05

As Health Costs Rise,
Companies Market Policies
Tied to Specific Illnesses

The insurance industry is rolling out a new breed of products designed to lessen the financial blow of serious or life-threatening illnesses.

A growing number of insurers, including MetLife Inc., American International Group Inc. and UnumProvident Corp., have recently introduced new or expanded policies that pay a lump sum that you can use however you want if you’re diagnosed with a covered health condition — such as cancer, heart attack or stroke.…

The policies provide lump-sum payments that can be used to cover many costs related to illness — including copayments, travel expenses, experimental treatments or wages of a family member leaving work to help — that often aren’t covered by health or disability insurance.

Insurers say payouts for their critical-illness policies typically average about $25,000, which can cost about $300 to $500 a year, depending on the health, gender, age and location of the insured. Some insurers are now offering higher-end versions, such as AIG’s new “CriticalCare MVP” insurance, that pay benefits of more than $100,000. (A policy with a $100,000 benefit might cost about $1,500 to $2,000 a year.)…

It would be interesting to know not just the average payout, but what the enrollment is and likelihood of use by the individual. This smells like a very lucrative boutique type of policy.