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Category Life Insurance

Gender-inclusive Critical Illness

19 January 2009 Dr. John Schoonbee, Medical Officer, RGA Reinsurance Company of South Africa Limited

Critical Illness (CI) products have evolved from their original simple design into some of the most complex life insurance products around. What were initially intended to only cover critical events or illnesses have changed to now cover a myriad of less critical conditions. In order to make the payout relative to the severity of the condition, the payout of the less critical condition is usually a percentage (for example a multiple of 25%) of the full sum assured.

The pressures of a very competitive marketing environment in the life insurance industry has driven the need to continually add more and more events and conditions, as well as ‘tier’ some of the existing conditions – paying out only a percentage of the sum assured depending on the severity level of a condition (per the policy definition).

However, gender-based events or conditions such as conditions related to female- or male-specific organs have not been included in the evolution of CI. The main reason for this is that the major pathology that affects the breasts, uterus, ovaries, testis, prostate and penis, which can reasonably be considered critical illnesses (or events) are generally forms of cancer, and all the cancers related to the gender-specific organs are already covered.

Finding the criteria for other male-specific critical illnesses can be difficult. Some insurance companies have added payouts for surgeries that may remove all or part of the penis, as well as one or both testis. The need for these procedures would generally be related to cancer of the affected organs, or advanced prostate cancer that requires orchiectomy for reducing testosterone levels. Because this would be related, no payment would be received, as the payout for cancer would probably reach the sum assured.

It is also difficult to come up with female-specific critical illnesses that are not related to cancer. The only exceptions are some events related to pregnancy and childbirth. High-grade placental abruption, amniotic fluid embolism and uterine rupture during childbirth are three possible conditions that can have severe consequences - certainly more so than many other events or conditions already covered in current CI products. It would therefore make sense to add these conditions to current CI products, as there is definitely a need to be met.

As the evolution of CI products continues, these maternity-related benefits, as well as some of the other less severe conditions may well become more common in the market, especially as insurers continue to look for ways to add benefit, as well as new and unique selling propositions to define their products in a highly competitive market.

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