The market for cancer and critical illness insurance coverage in the United States is expected to grow significantly over the next decade.
These policies pay a lump-sum cash benefit following the diagnosis of a covered condition. Critical illness sales were up 14 percent last year with the vast majority of purchases made as part of employer-offered benefits.
Fueling the prediction for future growth are several significant factors. The first is increasing awareness of the risk of diseases including cancer and cardiovascular disease – heart attacks, strokes and the like. In 2020, some 1.8 million American adults will be diagnosed with cancer according to the American Cancer Society. Nearly 800,000 will have a heart attack. In both cases the numbers are increasing and while that isn’t good news, survival rates are increasing, along with their associated costs.
Second is the aging of two key demographic cohorts. There are 65.2 million GenXers, those born between 1965 and 1980. Another 72 million comprise the Millennial generation that just passed Baby Boomers as the largest population segment. GenXers are projected to surpass Boomers around 2028.
For both of these cohorts, traditional employment and employer-provided health benefits will be far less common than for prior generations. According to the Bureau of Labor projections, the percentage of Americans who are defined as gig economy workers will increase to 43 percent this year. Among those fortunate enough to have employer-offered coverage, more are selecting high deductible plans which leave them exposed to financial risk following a hospitalization or critical illness diagnosis. How the 137 million working-age individuals handle health insurance coverage will take on a new dimension.
Finally recognizing these changes are some of the nation’s leading insurance companies currently offering critical illness insurance through employer plans or on an individual basis. According to the American Association for Critical Illness Insurance (AACII), the leading players include Aflac, MetLife, Unum, Mutual of Omaha with newer entrants like Aetna. It’s logical to expect theme to recognize the opportunity and increase their marketing and sales efforts.
Currently some five million individuals have either cancer-only or comprehensive critical illness insurance coverage according to AACII. The average new benefit amount purchased ranges from between $15,000 to $22,000 depending on the type of coverage selected. The typical new buyer is in their 40s and 50s, reflecting a population that, once educated to their risk and planning options, will increasingly adopt this coverage.