Father of critical illness insurance makes a plea to advisors

(January 20, 2003) The South African heart surgeon who pioneered the concept behind critical illness insurance says advisors owe it to their clients to spread the word about CI. Dr. Marius Barnard was a keynote speaker last Friday at the first world critical illness insurance conference in Vancouver.

“In 1983 I had a tremendous audience of six,” Barnard joked. “I couldn’t believe I’d be standing here in front of an audience of hundreds hearing that in some parts of the world they sell millions of CI policies a year.”

CI is still in its infancy in Canada, but the statistics reveal a need for the product does exist, Barnard said. Every day in Canada 200 people have a heart attack, 340 are diagnosed with cancer and 137 people suffer a stroke, he explained.

As he flipped through slides of a heart attack in progress and lungs killed by cancer, he said, “These are people you advise. You have an awesome responsibility. I beg you to tell your clients about CI. You owe it to them to tell them such a product exists.”

Critical illness insurance is designed to pay out a lump sum when a client is diagnosed with a covered illness so that a claimant can maintain his standard of living. There are no restrictions on how a claimant spends his lump sum.

Barnard told the story of one of his elderly heart patients, who was living on only a small pension and more worried about his financial well-being than his physical health. When the man died, his life insurance did not pay out because he didn’t have enough money to pay for premiums while he was alive.

“Look further than just the fuzzy love of the people and look at their finances,” he said, noting that the average age of CI claimants in Britain, arguably the most successful CI market in the world, is 41. In Canada, the average life span is 78 for men and 83 for women. “Medical costs are the cheapest part,” Barnard said. “It is the survival that is the most expensive.”

About 700 delegates attended the CI conference. Most say they already sell CI or plan to start soon. Advisor.ca will have more coverage of the conference later this week.

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