Critical insurance conference aims to boost awareness

(January 17, 2003) As the world’s first critical illness insurance conference kicked off in Vancouver, the chief organizer wasn’t shy in expressing his opinion that Canada trails the rest of the world significantly when it comes to critical illness knowledge. To the 350 advisors at the opening reception on Thursday night, many from Canada, the message was clear: It’s time they pull up their socks and get serious about critical illness (CI) insurance.

“My goal with this conference is to help bring Canada up to speed on the CI market,” said Alphonso Franco, the dynamic young advisor and chief organizer for the inaugural event. “We are too far behind.”

Still, the latest Canadian sales numbers show CI’s popularity is on the rise. According to LIMRA, a worldwide association providing research on the insurance industry, CI premiums and benefit amounts were up 41% and 44%, respectively, over the first three quarters of 2002. The total number of CI policies increased by 37%.

David Wm. Brown, a Toronto-based CLU whose family has been in the insurance business for more than 60 years, says poor markets have helped boost CI’s popularity. “CI has saved insurance companies and advisors,” Brown says. “Advisors are jumping on the bandwagon now. They didn’t jump on two years ago because it was easier and more profitable to sell mutual funds and universal life.”

But the industry is nowhere near its peak, says Franco.

A London, England-based financial advisor and a speaker at the conference, Moshe Hadari explained that, while CI has existed in Britain since 1985, it took eight years before people realized what it was. “Now it is unusual for advisors to not discuss it with clients, let alone make a sale,” he says. “For me, if my clients medically qualify for CI, it would be unusual that they would not have it.”

Critical illness insurance really only entered Canada in the mid 1990s. Hadari predicts it will still be some time before it goes mainstream. “In Canada it will definitely be three to four years before all advisors will be talking about it.”

It will help when advisors themselves own the product, says one conference delegate. “If you as the advisor don’t own CI, but are trying to convince a client to buy CI, the music doesn’t match the words,” says Jim Rogers, chair of Rogers Group Financial in Vancouver. “You can’t get your client to buy something you don’t have. If you don’t do it, then you are just a salesperson.”

Twenty years into the business, Hadari’s biggest piece of advice is this: If advisors don’t sell CI, they should be prepared to be sued by their clients. “If one of my clients declines CI when I recommend it to them, I make him sign a waiver,” Hadari explains, adding that if a client has a substandard policy the advisor could be liable.

“Seventy per cent to 80% of Canadians will suffer a critical illness during our lifetime,” says Franco. “So people have to plan now for living instead of dying.”

The four-day conference features speakers from England, Australia, New Zealand, the U.S. and South Africa, where critical illness insurance was invented. The conference continues until Sunday. Advisor.ca will have more coverage next week.

Filed by Sheila Avari, Advisor’s Edge, savari@rmpublishing.com