How Have Critical Illness Insurance Sales Developed In The UK?

Critical illness insurance, origin of South Africa arrived in the UK in the year 1985. Some companies tried to market the product but in vain. It was not until the late 1980’s that the real success for critical illness cover came.In the year 1990, people seemed interested in having a critical illness cover. Therefore, around 100,000 critical illness policies could have been sold in that year. Market surveys revealed that the growth of critical illness cover sales would be continuous for the coming years. The reason behind was that many people could have been interested with the direct benefits offered. Thus, by 1997, sales of approximately 633,000 critical illness policies could be counted in the UK. Furthermore, in the year 1998, sales had further increased to 695,000 with considerable rise recorded in the years 1994/95. By the end of 1998, about 2.25 million critical illness policies could be found in the UK.Moreover, critical illness cover was sold in two different formats known as accelerated and standalone. Around 82 percent of covers sold could have been accelerated covers. Out of these, about 40 percent may have been term insurance, 12 percent may have been whole life and 48 percent could have been endowments. As a matter of fact, the average sum insured for each type of accelerated critical illness policies could have been as follows: GBP 47,000 on term insurance, GBP 68,000 on whole life and GBP 35,000 on endowments.Additionally, 18 percent of critical illness policies sold in the year 1997 could have been standalone. Out of this, about 50 percent may have been riders to term insurance policies while the remaining 50 percent could have also been riders to whole life policies. The average sum insured might have equaled GBP 48,000 on term insurance and GBP 64,000 on whole life insurance. The average monthly premium payment for both type of critical illness policy could have been GBP 370 and GBP 380 respectively.There are other reasons why people chose to take a critical illness cover in the UK. Around two thirds of critical illness sales could have been made regarding mortgage. Many people consequently accelerate their critical illness cover with mortgage. Should they happen to fall ill in the future, the remaining mortgage balance could be paid out by the lump sum awarded to them. Becoming self employed can be another reason that may have pushed people towards taking out a critical illness cover. Considerable sales volumes could have been recorded because the self employed do not involve in income protecting procedures as company employees. Critical illness insurance may offer help in case the job is lost for the self employed. The need to finance children so that they attain higher level of education may have also boosted critical illness policy sales in the UK.The trend of critical illness policy sales had been an ever increasing one since its arrival in the UK. Accelerated policies, as seen have been more successful than standalone critical illness policies. The increasing trend of critical illness cover sales is predicted to continue.