As increasingly popular consumer-directed health care plans highlight the benefits of having a lump-sum of cash right when employees need it most, EBA checked in with several critical illness carriers - American General, Colonial Life, Guardian, MetLife, Trustmark and Unum - for a refresher on what makes CI plans so critical.

What is the most important thing brokers should keep in mind when selling CI?

Clea Barth, assistant vice president, Critical Illness Insurance Product Management, MetLife: Critical illness insurance is a simple and cost-effective product that complements employers' other insurance benefits.

This year, MetLife's Employee Benefits Trends Study revealed that 45% of full-time workers already live paycheck to paycheck, so there isn't a savings nest egg to borrow against to cover the spike in expenses not covered by traditional insurance in the event of a critical illness. With 51% of employees purchasing the majority of their financial protection products through the workplace, according to the study, brokers have an opportunity to engage in important conversations with their clients about solutions to complement existing benefits.

Bob Clancy, national director, Accident & Health Sales and Training, American General Life Companies: You are providing a "financial tool" that needs to be incorporated into the entire benefit and retirement package of your individual prospect.

Keep in mind also that the probability of survival following a diagnosis of cancer or experiencing a heart attack or stroke is very high with today's advances in medical technology. But, survival has a cost. More times than not, clients find out what their medical coverage doesn't cover only after an event.

Randy Finn, director, Product Development, Colonial Life: Eventhe best health insurance will not cover out-of-pocket costsforco-insurance, rehabilitation, home modifications, caregivers or child care. Savings accounts (if they exist) and 401(k) plans can be exhausted quickly from a serious illness.

Barry Petruzzi, second vice president, Group Benefits, Guardian Life Insurance Company of America: Guardian research shows that 70% of consumers feel that their families would sustain financial hardship or stress if they were to suffer a critical illness, with nearly a third saying it would be a substantial hardship or burden. One in five Americans who have had direct experience with a critical illness used a credit card to finance recovery-related expenses. The majority of consumers say they would use savings to fund out-of-pocket expenses not covered by their medical or disability insurance, with 40% saying they would seek assistance from their families. Taking out a second mortgage, using credit cards and seeking assistance from friends are the next most frequently cited sources.

What is a common mistake made when communicating the benefit?

Scott Brown, director of Product and Market Development at Unum: Some people focus on the lump-sum critical illness payout as simply a way to replace lost income, but CI coverage can help pay for the costs that come with the diagnosis of a serious illness, from child care and travel to missed work, deductibles and other medical bills not covered by health insurance. Many people think of CI coverage as cancer insurance, but a host of serious conditions, from stroke or heart attack to organ transplant, are part of the CI policy.

Brad Ridnour, East Coast regional sales vice president, Trustmark Voluntary Benefit Solutions: One of the common mistakes brokers make is they don't fully understand the value of CI and exactly how it works alongside an employee's health plan. Know how to answer the question, "Why do I need CI if have a good health plan?" [CI] makes up for what even the best medical plans won't cover, such as deductibles, co-insurance payments, non-covered experimental-type treatments, or out-of-network services. If open-heart surgery was needed from an out-of-network physician, the CI lump-sum cash payment would help pay for it.

Clancy: Discussing premiums before ever establishing an understanding of what critical illness insurance will provide for [the insured] and the family unit is a common mistake. Focus on the high probability of surviving an illness, not the odds of being diagnosed. Getting into the "weeds" on definitions and exclusions too early in the sales process is another common mistake. Clients first need to understand the negative consequences to themselves and family if they do not have the protection of this benefit.

Petruzzi: There is a next generation of critical illness insurance products that are more flexible than older types. These policies offer protection for illnesses that recur, incentives for wellness and preventative treatments, and some level of coverage - when coupled with a hospital rider - for ailments that are not covered by the core policy. It is important for brokers and benefit decision makers to be committed to ongoing education to learn about the new developments in the marketplace.It is a concern when some producers tell clients that they don't need critical illness insurance if they have disability insurance. Some clients may decide that they only want disability insurance, but there are very few people who would turn down the opportunity to receive a check for several thousand dollars upon diagnosis of their ailment.

What makes CI an important benefit to have now, versus LTC, disability, etc.?

Finn: Criticalillnessinsuranceisa greatcomplement todisability,life andmajormedical coverage.Disability protects a portion of income and pays the same monthly benefit regardless of the severity of the total disability. CIplanscanhelpmake up the difference between the flat disability benefit and the living wage, bridge elimination period gaps and give insureds more time to focus on recovery when the disability benefit ends. Life insurance is a"deathbenefit"thatcan help cover remaining treatment costs, funeral expenses and the insured's lost income. Critical illnessinsuranceis a"living"benefit for medical and nonmedical recovery expenses.

RIDNOUR: In the past, recovery statistics were much lower, and people were protected with life insurance. Now, heart attack and cancer survival rates are higher. People often have a pile of medical bills afterward and are significantly less able to earn an income.

According to the American Journal of Medicine (2009), the share of bankruptcies attributable to medical problems is 62%. That number rose 50% between 2001 and 2007. Of those who declared bankruptcy due to medical problems, 75% had health insurance.

Barth: CI can provide great value in a time when out-of-pocket medical costs are a leading cause of financial hardship. It is not a trade-off between one of those financial protections over the other, but rather how these and others, such as life insurance, can work together to help provide the strongest possible financial safety net for employees.

Brown: Each of these benefits is an important element in a strong financial safety net, but at a time when health care costs are climbing steadily and health coverage has growing gaps, the role of critical illness coverage has never been more important. The lump-sum payout upon diagnosis, available in sums up to $50,000, means the freedom to pay the bills and cover the expenses the policy holder chooses.

What is the focus of your CI product in 2010 and beyond?

Petruzzi: Guardian is focused on leveling the playing field so that small to midsize business owners with two to 1,000 employees can compete with large employers by offering a robust, affordable and easy-to-administer benefits package.

We offer a hospital rider that pays a benefit for almost any treatment that requires hospitalization and isn't covered by the base critical illness policy.It is important to note that Guardian's base CI policy simply requires a diagnosis of an illness and doesn't require a hospital stay. We recognized that while CI policies cover the most prevalent ailments, there are still situations where people battling major illnesses can benefit from an immediate infusion of cash.

According to a Guardian survey, "Benefits & Behavior: Spotlight on Consumer Driven Healthcare," two key motivators would make consumer-driven health care more appealing to consumers: employer contributions to HSAs (61%) and the inclusion of CI insurance coverage (57%).

Barth: MetLife is concentrating on keeping the product competitively priced for employers and employees, and simple to understand and enroll in for employees.

We have found that keeping the product simple - coverage for only certain conditions, providing a lump-sum payment and a guaranteed issue offering -has led to successful participation rates.

Finn: [At Colonial Life, we'll be] promoting our new individualcriticalillness product,which includes plan options with health screening/prevention benefits, subsequent diagnosis and covered conditions beyond those of heart attack, stroke and cancer.

Clancy: At American General Life Companies, we believe many supplemental products can be combined on one "chassis" to fill potential gaps in medical coverage today and in the future as a result of possible changes due to health reform.

Brown: In November, the vaccination for the H1N1 flu became a covered wellness procedure under Unum's critical illness policies. That means group CI plan policy holders can get $75 for having the vaccination, and individual policy holders can get $50 - even if they don't incur any cost for the vaccine.

In the longer term, we have seen a very strong response to our group CI coverage, which we just launched last year. Our sales of CI coverage have been on an upward trend, driven largely by that group offering, which includes multiple funding options, from employer-paid to shared funding to employee-paid. Employees who buy the group coverage at work own that policy, at the same rate, even if they leave their employer.

It's a product we think will continue to have very broad appeal as employers look for more ways to help their workforce fill in the gaps in medical plans.

Ridnour: We plan to add additional benefits to all of our CI products. Offering care navigation, expert referral services and access to specialists ensures access to the finest doctors, the finest care, and gets policy holders the help they need to navigate the health care system.