The year 2000 was the best yet for critical illness sales in Canada. According to the latest individual critical illness insurance sales survey compiled by LIMRA International, new annualized premiums jumped 63% over 1999. The total number of policies sold leaped by an astounding 62% – effectively doubling the number of in-force policies!
This year’s annual report was based on the sales of 14 out of the approximately 18 critical illness carriers that operate in Canada. As CI sales do not have to be reported to the Office of the Superintendent of Financial Institutions, LIMRA could not specify what percentage of the market these 14 companies represent.
Notwithstanding, the numbers provided are impressive. The combined number of policies sold was over 21,000 bringing the total-to-date in-force number of CI policies up to over 41,000 – a growth rate of 97%!
Although the premiums are up, the average size of the policies dropped slightly. Renewable policies carry the highest average policy size at $92,985, down 4% from the previous year. Limited period level (guaranteed level premiums to a certain age, usually 65 or 75) policies saw an average size of $86,135, a decrease of 6% from 1999.
The latter was the preference of producers. The premium market share of limited period level has risen to 52% up from 44% in 1999 The premium growth for limited period level was 82%, and the number of policies sold was up 100%.
LIMRA also reported that 97% of the CI products covered six or more conditions, and only three percent covered five or fewer conditions, namely heart attack, stroke, and cancer.
The report concluded that while the critical illness market has grown substantially, it has not caught up to other products. Disability insurance premiums, for example, were two and a half times the CI premiums for 2000.