Term CI policies lead the wayBy Alain Thériault | March 09 2016 07:00AM
Total sales of individual critical illness (CI) insurance are up across the board. Accounting for the largest number of policies sold in Canada during in the third quarter of 2015, term CI is particularly popular.
Since the beginning of 2015, growth in CI has remained steady and was up by 4% in the first quarter, 6% in the second, and 7% in the third quarter, each of these quarters being compared with the corresponding quarter in 2014. The numbers are an improvement after a decline in 2013 and an increase of just 2% in 2014, this being measured in terms of premiums.
Temporary and permanent CI products both saw their premium sales increase by 4% during this period. Sales of the limited period CI product (often called Term 75 or T75) jumped by 10%.
The number of CI policies sold during the third quarter of 2015 increased by 8% compared to the third quarter 2014, and growth was spread almost equally across all products. However, 43% of CI policies were sold in the form of term coverage, 40% with a limited coverage period, and 17% as permanent policies.
Limited pay products accounted for the most sales when measured in terms of premiums during the quarter in question, capturing 48% of the market. This was followed by permanent products with 31% of premiums sold and temporary products with 21% of premiums.
The captive distribution network had the most success selling CI, posting a 9% rate of growth in terms of premiums. The independent channel achieved a 6% increase in sales during the same period. LIMRA attributes the career network’s success to strong sales of permanent CI, which were 15% higher for this channel in the third quarter of 2015 than they were during same three months of 2014.