The 4th World Critical Illness Insurance Conference, “Critical Matters” held in Victoria, B.C. from Jan. 25-27 kicked off with a speech by Dr. Marius Barnard, the renowned South African surgeon who not only helped pioneer heart transplant surgery, but also developed the world’s first critical illness insurance (CI) policy in 1983. In his address, entitled, “The Good, The Bad and The Future,” Dr. Barnard called on insurers to offer simpler, more affordable CI products.
As part of his presentation, Dr. Barnard showed a video re-enactment of one of the patients who helped inspire his idea for the product. Terminally ill with lung cancer, this 34-year-old divorced mother was forced to work right up until her death to support her children. This and other cases like it, sparked his idea for CI, which “provides financial health when you need it most,” he told the crowd of some 600 advisors.
As medical advances continue, CI is becoming more and more necessary, Dr. Barnard contends. People need this product because they are surviving critical illnesses, he explained, citing statistics that demonstrate dramatic increases in survival rates. For example, in 1950, only 11% of patients survived a stroke. Today, this survival rate has jumped to 70%. But the bad news is that only 10% of these patients will totally recover and 53% of stroke survivors will be completely dependent on others, noted Dr. Barnard.
“You need this insurance not because you’re going to die, but because you’re going to live.”
Dr. Barnard, however, wants to make sure that the individuals who need the product most, can afford it. He says he prays that governments, reinsurers and insurers will support the product and that the industry will provide better and more affordable products.
To do this, he recommends that new CI policies be developed which recognize severity of illness. Early diagnoses and treatment now means that many illnesses that once were considered critical are no longer. For example, coronary surgery has become a much less dangerous operation than in the past and depending on the stage of severity, many forms of cancer are no longer life threatening.
For this reason, he recommends, that CI payouts be graded according to the stage of cancer or heart attack severity, for example. Grading payments according to illness severity would help bring down premiums, he contended. “If we can reduce the amount and number of claims, we can reduce the premiums and make it more affordable.”
The principle is that CI insurance should pay out when the policyholder is suffering financial problems due to their inability to continue working. If the illness is not severe, then they won’t need this financial security net, he argues.
If changes are not made, Dr. Barnard says critical illness insurance “will become so expensive that no one will be able to afford it...That’s the last thing we can allow.”
Dr. Barnard also participated in a panel discussion that wrapped up the conference where he repeated his message that change is needed. He said he blames actuaries and insurers for not recognizing the changes in medicine. He said there is a “desperate need” to develop a product that reflects what is happening in medicine today.
If people can’t afford CI protection, “I’ll blame you for it” was his message to the insurance industry. “You must develop a new product.” There is still a place for the traditional, pricier product, but develop a cheaper, simpler alternative product, for those who cannot pay high premiums, he asked the industry.
Although they do not develop the products, he said that insurance advisors also have a responsibility in making sure accessible, affordable CI products exist. “You are not putting enough pressure on (insurers). I demand of you to start pushing for a change,” he told the advisors.
During his presentation, Dr. Barnard also told the audience of insurance advisors that they do not do justice to themselves and the important role they play in society. “I think you sell yourselves very badly. You should be proud of what you do.”
Advisors who sell CI are ensuring that their clients will have financial security when their health deteriorates, he added. “You are not just selling a policy, you sell a need.”
Don’t be ashamed of your profession, he continued. “Go shout it from the rooftops…I’m an insurance advisor and I will give you money when you need it most.”
He ended his presentation by saying that he doubts he will be speaking at the World CI conference again. Diagnosed with prostate cancer several years ago, Dr. Barnard found his 36-hour trip to Canada difficult this time around. “I may never see you again. I thank you for allowing me to spend 24 years with you and I thank you that when my patient is told the worst news of their life…they’ll have financial security.”
Interestingly, at the panel discussion on the last day of the conference, he left his final appeal for another living benefits product: long-term care insurance. In regards to this product, he said the industry is totally failing the elderly. “Develop a product and sell it to the most vulnerable,” he asked.