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Critical Illness (Standalone CI features (Extremely similar to term…
Critical Illness
Standalone CI features
UW: similar to preferred life (rigorous)
Comm: similar to term
Extremely similar to term insurance
Pay lump sum for CI
No benefit for death
Term structure
Basic v.s. Enhanced
=> # of conditions
ROP options
on expiry
on surrender
on death
Guarantees
Insurer can't change defined conditions
premium guarantees
Prod design considerations
high cost of benefits for age >75
Avoid anti-selection
High cost of long-term guarantee
Limiting benefit for non-life threatening conditions
Acceleration type
Partial acceleration
pay part of face for CI, then remainder for death
higher premium than standalone
Full acceleration
Combo of CI and life
pay face at earlier of CI or death
Product Type
Standalone
Coverage only for CI
Sold through financial advisors
Acceleration
Combine CI and DB
Sold through bank => mortgage protection