Critical Illness Insurance Comparative Claims Analysis IndividualGroup Cancer 70%66% Heart Attack 14%16% Stroke 5%4% Other5%2% CABS 4%6% MS 2% 5% Paralysis 1% Source: Individual – Munich re Survey 2006 since inception. Group – ACE INA Canada – since 1998. REASON FOR DENIED GROUP CLAIMS: -About 80% are due to pre-existing conditions.
About 20% are due to failure to satisfy the definition.
GCI Inc. 07/9 E.& O.E.
HR NIGHTMARE PERCEPTION REALITY What Employee thinksis covered? What Plan actually covers!
Exclusions & Restrictions To Avoid BAKER’S DOZEN + 12
PLAN STRUCTURE X vs BUNDLED STAND ALONE AN AVOIDABLE TRAP
BUNDLEDVS.STAND ALONE ►SUBSIDIZED RATES ► UNPREDICTABLE RATE INCREASES ► LOSS RATIO AFFECT (Life, A.D.& D., LTD, C.I.) ► LIMITS SHOPPING ► JEOPARDIZE PRE-EX TRANSPARENT PRICING PRICING STABILITY MINIMIZE LOSS RATIO AFFECT MARKET ACCESS PRE-EX GRANDFATHERED
CRITICAL ILLNESS INSURANCE “DEFINITIONS” MOST IMPORTANT CONSIDERATION DETERMINE IF AND WHEN YOU WILL BE PAID NOT ALL PLANS ARE THE SAME!
characterized by the uncontrolled growth and spread of malignant cells and the invasion of tissue. This includes Leukemia, Hodgkin’s Disease and invasive Melanoma.”
“a definite diagnosis of a tumor
characterized by the uncontrolled growth and spread of malignant cells and the invasion of tissue. The diagnosis of Cancer must be made by a Specialist.” Omission
HEART ATTACK Good Definitionvs.Poor Definition
“ rise and fall of biochemical markers
considered diagnostic of myocardial Infarction (heart attack).”
“an elevation in cardiac biochemical
markers, or the elevation of cardiac enzyme levels, consistent with a heart attack.” Restrictive
PARKINSON’S DISEASE Good Definitionvs. Poor Definition
“by two or more of the following:
▪ muscle rigidity ▪ tremor, or ▪ bradykinesis” “ by two or more of the following: ▪ muscle rigidity ▪ tremor, or ▪ bradykinesis and the insured person requires substantial physical assistance from another adult to perform two or more activities of bathing, dressing, toileting, transferring, bladder and bowel continence and eating.” Uncertainty
excluded: ▪ Cancer in situ; and ▪ Any skin cancer, other than malignant melanoma into the dermis or deeper; ▪ Early prostate cancer (stage A or equivalent staging); ▪ Any tumor in the presence of any human Immunodeficiency virus (HIV).”
“The following cancers are excluded
from coverage: ▪ Carcinoma in situ; ▪ Stage 1A malignant melanoma (melanoma less than or equal to 1.0 mm in thickness, not ulcerated and without level IV or V invasion); ▪ Stage A (T1a or T1b) prostate cancer, ▪ Any non-melanoma skin cancer that has not become metastatic (spread to distant organs.” Retroactive
Sports Exclusion Good Definitionvs.Poor Definition
“ You are engaged in any hazardous sport including but not limited to sky or scuba diving; ballooning; hang gliding; bungee cord jumping; racing in any form (other than on foot) and all professional sports. This does not include normal vacation sports such as skiing or snorkeling. We will deny claims when we determine that undue risk or negligence was a factor. Other sports will also be excluded where they involve a higher risk due to inexperience, lack of care or adequate knowledge of conditions.”
KIDNEY (RENAL) FAILURE Good Definitionvs. Poor Definition Kidney failure means a definite diagnosis of chronic irreversible failure of both kidneys to function, as a result of which regular haemodialysis, peritoneal dialysis or renal transplantation is initiated Means end stage renal disease due to chronic irreversible kidney failure, requiring the Insured Person to undergo regular hemodialysis, peritoneal dialysis, or require renal transplantation Subtle
STROKE Good Definitionvs. Poor Definition Evidence of permanent neurological deficit persisting for 30 consecutive days ►New objective neurological deficits on clinical examination persisting continuously for at least sixty(60) days following the diagnosis of the stroke. Severity
MULTIPLE SCLEROSIS Good Definitionvs. Poor Definition Multiple Sclerosis means a definite diagnosis of at least one of the following: ▪two or more separate clinical attacks, confirmed by MRI showing multiple lesions of demyelination ▪ well-defined neurological abnormalities lasting more than 6months, confirmed by MRI, showing multiple lesions of demyelination; or ▪ a single attack, confirmed by repeated MRI, which shows multiple lesions of Demyelination which have developed at intervals at least one month apart Means the definitive written diagnosis by a Physician who is certified as a neurologist confirming at least moderate persisting neurological abnormalities, with impairment of function, but not necessarily confining the insured to a wheelchair or bed Severity
BENIGN BRAIN TUMOR Good Definitionvs.Poor Definition The tumor must require surgical or radiation treatment or cause irreversible objective neurological deficits. No benefit will be payable under this condition if within the first 90 days following the later of:
lead to a diagnosis of benign brain tumor The histologic nature of the tumor must be confirmed by examination of tissue (biopsy or surgical excision) Unreasonable
CHANGE DEFINITIONS Good Definitionvs.Poor Definition
( A good policy doesn’t list
this restriction.) “ Company reserves the right to change the contract definitions for Conditions covered under any given plan.All claims under this Policy shall be adjudicated using the definition of any Condition(s) that is in effect at the time the claim is incurred. Accordingly, the Plan Member must ensure that he has the most current version of this Appendix at the time he submits a claim under this Policy.” Unilateral
MAJOR ORGAN TRANSPLANT Good Definitionvs.Poor Definition Major organ transplant means a definite diagnosis of the irreversible failure of the heart, both lungs, liver, both kidneys or bone marrow and transplantation must be medically necessary Means being either the recipient of a transplanted heart, lung, liver, kidney, pancreas or bone marrow performed by a Physician who is certified to conduct such transplant, or enrolled in a recognized organ or bone marrow transplant program in Canada or the United States Not Legally Sound
condition under this policy and thispolicy will automatically terminate, if within 90 days following the later of the Issue date and the date of the last reinstatement of the policy: 1. You are diagnosed with Life Threatening Cancer; or 2. any sign or symptom of any type of cancer becomes first Manifested; or 3. any medical testing or investigation was initiated which subsequently leads to a diagnosis of any type of cancer.” The cancer exclusion period is 90 days from the later of: 1) the Effective Date, or 2) the date of The last reinstatement of the policy. In the event of such diagnosis the policy will remain in force but cancer will no longer be considered an Insured Condition, except for a subsequent diagnosis of unrelated cancer. Denial & Termination
Life Insurance Co. Group C.I.I. Pays Claims Pays Premium Insures Employees Company Employees Critically Ill Employee Claimant Premium is a Tax Deductible business expense for Company. Claimbenefit is received Tax-Free,in a Lump Sum payment, by Employee Premium is NOTa Taxable Employee Benefit to the Employee ‘Based on a CRA ruling in 2003 involving an Alberta Group C.I.I. Case, Arthur Drache Q.C. (F.P. 2003/5/13) “Benefits “ provided by an employer are taxable as a benefit unless there is a statutory exemption. There is such an exemption for Group Sickness & Accident insurance - based on Provincial Insurance Act.’
GROUP PLAN EVALUATIONCHECKLIST 1. Approval -Guaranteed Issue 2.Plan Structure -Stand Alone 3. Pre-existing -Reduce or Eliminate 4.General Exclusions -Few As Possible 5. Level of Benefits -No Restrictions Based On Income 6.Scope of Coverage -Most Comprehensive / Optional 7. Covered Conditions -Most Available / Occupational HIV
GROUP PLAN EVALUATIONCHECKLIST (Cont’d) 8.Definitions -Legally & Medically Sound/ No Disability -Few Exclusions & Exceptions 9. Qualifying Period -Shortest Possible if Over 30 Days 10.Moratorium Period -Plan Shouldn’t Be Cancelled 11. Claim Assessment -Reasonable Criteria / Not Limited 12.Portability -Should Be Portable / Convertible 13. Premium -Employer Paid / Non-Taxable 14.Underwriter -Insurance Company / Tax Status
. . THAT WAS DIAGNOSED WITH: CANCER? HEART ATTACK?
. . . . AND IS STILL ALIVE TODAY!
GROUP CRITICAL ILLNESS INSURANCE Need? Significant gaps in traditional Benefit plans. Medical & pharmacological advances have drastically changed patients’ medical treatments. Today’ fast paced stress inducing lifestyles are causing an alarming increase in acute illnesses.
Critical Illness Insurance Summary Dr. Marius Barnard recognized that LTD (Disability) wasn’t adequately addressing person’s needs. He realized that acute and life altering illnesses necessitate a large infusion of cash, usually immediately. He observed that without the stress of financial worry, recuperation is frequently more successful and rapid.