Advisor’s Edge takes critical look at critical illness insurance

(April 2, 2003) The future of critical illness insurance (CI) in Canada is anything but a guaranteed success despite being a hot product in a crowded market. In the April issue of Advisor’s Edge, assistant editor Sheila Avari looks at four problems plaguing the CI industry but also discusses how CI will have to evolve before it is fully accepted by advisors.

“CI has obviously been around for a few years and most advisors have heard of it, but the product has a few loopholes that every advisor has to understand and this story does a really good job explaining the problems and some possible solutions,” says Deanne Gage, managing editor of Advisor’s Edge.

In this cover story, found on page 20 of the magazine, challenges such as differing medical definitions, how to sell this supplementary coverage and helping clients actually qualify for a policy are all addressed. With CI competing with other types of coverage such as regular life policies, disability insurance and long-term care insurance, Gage notes that it is crucial for advisors to be able to clearly explain the difference between products before any client is going to buy in (for more information on living benefits, be sure to read Advisor.ca’s Ensuring your insurance expertise: A living benefits toolkit for advisors.

Speaking of product education, the same issue of Advisor’s Edge also features a look at the importance of educating advisors on the hedge fund industry. The article, found on page 26, quotes veteran advisor and hedge fund trainer Robert Thompson as saying that, “five in every 20 advisors understands what a hedge fund is, and maybe one of the 20 actually uses them.”

For those advisors still getting up to speed on hedge fund jargon, a handy glossary of terms ranging from “arbitrage” to “short sale” is included as a sidebar in the article.

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Looking to drill down a little deeper on critical illness insurance? Get inside an underwriter’s brain with these four short CI case studies — their outcomes may surprise you.

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Filed by John Craig, Advisor.ca, jcraig@advisor.ca.