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Employer focus

4 things you need to know about critical illness insurance

When asked to compare the many critical illness insurance products currently on the market, a benefits advisor quipped, "When you've seen one, you've seen one." With so much variation among critical illness insurance products, employers may find it difficult to know which one best meets the needs of their employees. Securian provides four key pieces of information to consider when meeting with your benefits advisor or insurance carrier.

1. How premium rates are structured

Insurers offering critical illness insurance, whether on an individual or group basis, may choose to set up premium rates on either an "attained age" or an "issue age" basis.  See the descriptions below to better understand the difference. Historically, issue age has been the most common way to structure rates, but the notion is the preferred structure is changing. 

     Attained Age
  • Commonly referred to as "step" rates

  • Rates are based on the age band an employee is currently within

  • Rates typically increase as an employee ages

  • Rates pay for the current cost of the benefit at a particular age

     Issue Age
  • Commonly referred to as "level" rates

  • Rates are set to charge more than the cost of the benefit in the early years of the policy, less in later years

  • Rates are based on an employee's age at the time of policy issue

  • Rates may remain level for the duration of the policy if the employer contract stays in force

Though often called "level" premiums, issue age rates may change at renewal - based on the overall claims experience of the group, or if the employer switches carriers.

Individuals who pay using the attained age premium calculation method pay based on the risk assumed by the insurance company for their current age. 

2. Determining multiple benefit payments

When a condition is eligible for a benefit can differ significantly depending on how payments are structured in the policy.  Some critical illness products lump benefits together into categories; once a benefit is paid from that category, no additional benefits within that category are eligible for a payout.

For example, a category of conditions named cardiovascular may include heart attack, stroke and coronary artery bypass surgery. If a benefit for heart attack is paid, the insured is not eligible to collect either a stroke or coronary artery bypass surgery benefit in the future.

In contrast, the Group Critical Illness coverage offered by Minnesota Life or Securian Life, affiliates of Securian Financial Group, treats conditions independently.  "Each condition is eligible for a one-time benefit payout," says Eli Vogen, voluntary products director at Securian. "And, we offer a recurrence benefit for some conditions, allowing the insured to receive more than one benefit for the same covered condition up to the plan maximum."

3. The separation period between payments

A typical critical illness insurance policy will allow for multiple benefits to be paid within the policy, as long as a separation period is satisfied and the insured has not reached the overall maximum benefit limit. 

Under the multiple payment provision, most policies in the marketplace require a separation period of 180 days between the initial diagnosis and a subsequent diagnosis.  If the 180-day requirement is not met, a second benefit is not payable. 

Vogen notes, "The separation period requirement for the multiple payment provision in Securian's policy is 30 days."

4. Does the policy include a continuation benefit?

Not all policies allow an employee to continue coverage following termination of employment or retirement. This is an important consideration for employers when comparing the overall value of the coverage to employees.

For more information about Securian's voluntary products, contact your regional group sales manager or client relationship advisor.

Critical Illness Insurance provides limited benefits. The policy has exclusions, limitations, reduction of benefits, terms under which the policy may be continued in force or discontinued. For costs and complete details of the coverage, contact Securian Financial Group, Inc. Products are offered under policy form series 13-31600 or 14-32000 a state variation there of. Product availability and features may vary by state.

Check here for availability of the Group Critical Illness product underwritten by Minnesota Life Insurance Company or Securian Life Insurance Company, affiliates of Securian Financial Group, Inc.

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