Prudential Dives Into Critical Illness Coverage

By Cyril Tuohy

InsuranceNewsNet

Prudential Group Insurance has announced that it will offer critical illness insurance coverage through the workplace, a sign that the life and retirement insurance giant sees a need for the coverage and is keen to take advantage of recent growth in the voluntary benefits space.

Critical illness coverage will be offered to employers with 1,000 workers or more. The standard coverages in the policy cover major illness like heart attack, cancer, organ transplant, renal failure, stroke and coronary artery bypass surgery, the company said.

“The inclusion of critical illness insurance in a group insurance plan enables employees to help protect their financial wellness as well as their physical wellness,” said Robert Patience, vice president of voluntary benefits with Prudential Group Insurance. “The financial security this coverage provides can allow patients to focus on recovery instead of bills.”

The critical illness policy will be offered either on an employer or employee pay-all basis, and will complement the company’s group life, accidental disability and dismemberment, and long- and short-term disability coverage, Patience said.

Other benefits are available through the policy, the two most common being a wellness benefit, and coverage for Alzheimer’s disease. More than 35 conditions are covered, but policyholders will have to pay extra for those, Patience also said. The coverage is available in all 50 states.

Prudential has been studying the need for a critical illness product for the past three and a half years, Patience said in an interview with InsuranceNewsNet.

There is a need in the marketplace for critical illness coverage, he also said. The rise in out-of-pocket costs associated with health coverage and high-deductible health plans, and the fact that health coverage does not pay for expenses like transportation and day care, has left a “yawning gap” in the marketplace in which the need has remained “unfulfilled.”

Prudential’s policy pays a flat dollar amount, which can be used for anything the policyholder wants, so the product is “extremely flexible,” and provides an “easy and convenient” way to keep extra protection in place, he said.

Employers around the country are moving toward offering more benefits on a voluntary basis since it is employees, not employers, who typically pay for the coverage.

Sales of voluntary products for 2012 were up 6.6 percent over 2011, with total new business premium exceeding $6 billion, according to Eastbridge Consulting’s annual U.S. Worksite/Voluntary Sales Report.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].