Put simply, critical illness insurance delivers a predetermined lump sum payment when an insured is diagnosed with a specified eligible medical condition.
The product has evolved dramatically since its development in 1983, to such an extent that its name fails as an effective marketing tool. Critical illness is imprecise and increasingly out of step with the scope of that evolution.
A bit of history. On Dec. 3, 1967, Dr. Christiaan Barnard conducted the world’s first heart transplant. His team lifted the organ out of a 25-year-old accident victim, Denise Darvall, and placed it into the chest of 54-year-old Louis Washkansky at Groote Schuur Hospital in Cape Town, South Africa. The patient survived for 18 days before succumbing to pneumonia.
Dr. Barnard was not the only cardiac surgeon in the family. Marius, his younger brother by five years, shared the same profession. In the years that followed his brother’s historic operation, Dr. Marius Barnard grew acutely aware that patients who survived major surgery often suffered financial devastation afterward.
“They are alive, but they are financially dead because their health level is not capable of sustaining their financial needs,” he once said. The younger Dr. Barnard envisioned an insurance product that would help families withstand such a post-surgical financial crisis. “We as doctors are the physical doctors. Protection insurance is the financial doctor.”
Crusader Life Insurance — a specialty insurer headquartered in Johannesburg with a reputation for developing innovative niche products — became aware of Dr. Barnard’s medical advocacy. The company recruited him in 1983 to help craft the product’s covered conditions.
“Dread disease” insurance was launched Aug. 6, 1983. It covered cancer, heart attack, stroke and, thanks to Dr. Barnard’s urging, patients undergoing coronary artery bypass graft surgery.
The critical illness moniker emerged six years later, when Pegasus Insurance rebranded the product for its U.K. launch.
The product migrated to Canada in 1989, under labels such as covered disease, living benefits and critical illness protection. In those early days, Canadian insurers covered as few as six conditions or as many as nine: blindness, cancer, coronary artery disease, coronary artery surgery, dementia, heart attack, organ transplant, paraplegia/quadriplegia and renal failure.
Competitive leapfrogging drove insurers to increase the list of covered conditions. By 1996, it had grown to 12. It was 21 by 2002. Today most plans cover between 24 and 29. The list can top 31 conditions when advance and partial coverages are included. (Not all, however. Some cover as few as two.)
Carriers added early assistance, early detection, infectious disease coverage, long-term care, second-event and surgical-advance benefits, plus near-universal access to specialist second-opinion consultations that often reshape treatment.
Lump sum coverages can range from a $100,000 limit among specialty insurers to as much as $3 million, subject to age limits.
Inconsistent language
The government of Ontario still refers to catastrophic illness in at least one publication, even as insurers have moved past that and other early generic labels. More than 24 Canadian product lines exist under the critical illness banner, with labels like ” covered conditions,” “critical illnesses and conditions” and simply “illnesses.”
These inconsistencies alone are reason for change.
“Critical” is inherently subjective, carrying disapproval or judgment as much as signalling severity. It also raises the odd question of what constitutes “critical.” Depending on context, it can imply severity, judgment or crisis — a descriptor that lacks the precision an insurer needs to define eligibility objectively.
Medical historians, ethicists, physicians and sociologists broadly agree that disease, disorder, event, illness, impairment, procedure, sickness and syndrome have distinct parameters and are not interchangeable. Their only shared trait is describing a deviation from normal.
Yet critical illness policies insure conditions spanning each of those categories.
Even Dr. Barnard’s original four conditions illustrate the mismatch. A heart attack is an injurious event, not a disease or illness. A stroke is a medical event. Bypass and aortic surgeries are procedures. And cancer, unless metastasized, is often abnormal cell growth rather than an illness as most people understand it.
Among the broader roster, blindness, brain injury, burns, comas, deafness and speech loss are functional losses. Paraplegia and quadriplegia are often trauma-caused. Dementia, multiple sclerosis and Parkinson’s are neurological diseases. And an organ transplant is a procedure, however precipitated.
In short, much of what is currently branded critical illness insurance can’t accurately be described as an illness.
Insured medical conditions
There are multiple problems with the critical illness brand. It is unclear and inaccurate. It creates legal ambiguity. And it narrows the public’s perception of a valuable, evolving product.
Here’s a better idea: insured medical conditions insurance. It is both accurate and judgment-free, bypassing the loaded connotations of “critical.”
Rebranding would also create a marketing opportunity. Each insurer could use the name to spotlight the breadth of its own covered list, encouraging consumers to review specific conditions across insurers and select the policy that best matches their risk profile — something the vague critical Illness label doesn’t encourage.
Insured medical conditions can be presented as a hierarchy in which each insurer can emphasize the uniqueness of their product line.
The product grew significantly after its first rebranding 37 years ago, from dread disease to critical illness. This 43rd anniversary of Dr. Barnard’s creation is a good time to take another step forward.
In a sad irony, Dr. Barnard died in 2014, after a 17-year battle with prostate cancer — a condition absent from his original design but later added as insurers expanded coverage.
His vision was never about terminology; it was about protecting families from the financial consequences of serious medical conditions. The insured medical conditions branding would finally give that vision a name befitting the protection it provides.