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Critical Illness Insurance Market Size

ID: MRFR//7262-CR | 88 Pages | Author: Kinjoll Dey| January 2020

Out-of-pocket expenditures encompass direct payments individuals make to healthcare providers at the time of receiving services. The escalating prevalence of life-threatening illnesses, notably cancer, amplifies the financial burden associated with their treatment. According to the Centers for Disease Control and Prevention (CDC), the annual out-of-pocket spending for cancer survivors aged 18 to 64 in the US averaged about USD 1,000, contrasting with the expenditure for individuals without a cancer history, which stands at USD 622. Similarly, findings reported by the International Institute for Population Sciences (IIPS) reveal that in India, the average annual out-of-pocket expenditure for cancer reaches around USD 836 (equivalent to INR 57,232), marking the highest among various diseases in the country.

Data derived from the Medical Expenditure Panel Survey (MEPS) spanning 2011 to 2016 illustrates that 25% of approximately 17 million cancer survivors in the US encounter substantial financial burdens related to their care. These material costs encompass the financial aspects of managing a condition, including paying medical bills or resorting to borrowing money from other sources to cover these expenses.

Furthermore, research from Duke University published in the journal JAMA Oncology showcases that surveyed patients from the Duke Cancer Institute and affiliated clinics were spending up to 30% of their household income on healthcare in 2017. This financial strain persisted even among over 60% of individuals covered by private insurance. This underscores that cancer treatment emerges as an exorbitant undertaking, not solely for uninsured individuals but also for those with robust medical coverage. Even with insurance, patients encounter added financial burdens due to ancillary treatment aspects such as travel costs and increased time away from work.

In such challenging circumstances, critical illness insurance assumes a pivotal role by offering a lump sum payment, underscoring its significance in managing healthcare expenses. This lump sum is disbursed regardless of hospitalization bills and can be utilized for post-hospitalization medications, transportation, lodging, at-home care, and other associated expenses.

For instance, the Safeguard Tomorrow Insurance Plan by China Life Insurance Company extends comprehensive coverage for 41 critical illnesses, encompassing conditions like acute necrotic pancreatitis, aorta surgery, Apallic Syndrome, heart attack, and life-threatening cancer. Under this plan, 100% of the assured sum is disbursed, and coverage for critical illnesses extends up to the insured individual's age of 100.

Therefore, the escalating out-of-pocket expenditure among both insured and uninsured populations is anticipated to propel the growth of this market during the forecast period.

Covered Aspects:

Report Attribute/Metric Details
Market Size Value In 2022 USD 51.86 Billion
Growth Rate 15.00% (2022-2030)

Global Critical Illness Insurance Market Overview

The critical illness insurance market size was valued at USD 55.03 billion in 2023 and is projected to grow from USD 63.28 billion in 2024 to USD 197.85 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 15.32% during the forecast period (2024 - 2032). The growing awareness amongst people and patients regarding the benefits of using critical illness insurance is the key market driver enhancing market growth.

Global Critical Illness Insurance Market

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Critical illness insurance offers additional protection for illnesses like cancer, heart attacks, and strokes. The Affordable Care Act (ACA), shifting employer benefit goals, and new distribution strategies are just a few reasons for increased interest in critical illness insurance. A further factor anticipated to fuel market expansion is the rising prevalence of chronic disorders. It is predicted that the market for critical illness insurance will expand profitably. The primary reason for this growth in knowledge has been the rise in severe illnesses like heart attacks, cancer, kidney failure, and stroke. Untapped markets and developing nations have considerable growth prospects because they have low critical illness insurance awareness and uptake rates.

The need for insurance protection for critical illnesses is anticipated to expand as these markets develop and public awareness of healthcare issues grows. The market for critical illness insurance is anticipated to develop due to increased critical illness cases, higher costs for insurers, and a rise in the number of people without insurance. The market for critical illness insurance is predicted to be driven by rising medical costs. These policies give out cash to assist in covering those overruns whenever regular health insurance can come in short because such emergencies or illnesses frequently incur higher than normal medical costs. In addition, if a covered condition is discovered, critical illness insurance gives out a lump payment to the insured. This payout can cover anything from financing costs to medical expenditures.

The costs that health insurance does not cover, such as deductibles or out-of-network doctor fees, can also be covered by critical illness insurance. One of the main drivers of the growth of the critical illness insurance industry is the increase in the number of illnesses safeguarded by critical illness insurance policies. Major insurance companies are focusing on covering a variety of new ailments. The increasing prevalence of serious diseases like malignancy, heart disease, and stroke significantly fuels the market for critical illness insurance. The desire for insurance coverage to lessen medical care and rehabilitation costs rises as people become more cognizant of the financial strain connected with these conditions. Insurance companies can create unique, tailored critical illness insurance plans. Insurers can meet the varied needs and interests of those seeking critical illness coverage by providing flexible coverage options, specialized packages, and extra benefits.

After receiving clearance, HDFC Life might concentrate on critical illness products as it enters the health insurance market. The life insurance company will likely concentrate on critical illness products with IRDAI's approval. The business also wrote to the insurance authority to request permission to offer additional financial goods such as bank deposits, loans, and mutual funds.

Critical Illness Insurance Market Trends

  • Increasing geriatric population and sedentary lifestyle to boost the market growth

The growing geriatric population is one of the key driving factors fueling the market. A large number of the aged population is suffering from other chronic diseases such as heart disease, cancer, type 2 diabetes, and arthritis, further increasing the demand for HI policies among this age group. Moreover, adopting sedentary lifestyles among the adult population leads to an increased patient pool living with different chronic diseases. The National Cancer Institute estimated that around 1,806,590 new cancer cases were diagnosed in 2020, and 606,520 people died from the disease in the US.

Further, with the rising number of health issues among people due to unhealthy lifestyles, there is an increase in serious critical illnesses such as cancer, heart attacks and others. However, health insurance does not cover a range of such critical illnesses for which consumers are purchasing critical health insurance to cover the cost of medical bills, hospitalization fees and other related costs. In addition, the rise in instances of several diseases, such as brain tumors and cardiovascular diseases, further increases the demand for critical illness policy. Therefore, the rising number of critical health issues among people is one of the major driving factors of the critical illness insurance market revenue.

Additionally, Critical illness coverage provides a smooth experience to the insured regarding cashless medical treatment for their illness. In addition, it offers peace of mind to the insured without worrying about paying the high cost of medical bills out of their pockets. The reimbursement process is very smooth, and can the insured can even be eligible for cashless treatment at the best hospital and receive the best possible treatment. Therefore, the peace of mind and the smooth process of reimbursement and cashless treatment offered under the critical illness insurance coverage will provide major lucrative opportunities for critical illness insurance market growth in the upcoming years.

However, an increase in the number of critical illness cases such as stroke, cancer, renal failure and heart attack has proved to be the main cause of awareness among people. The increasing cases of critical illness and more expenditure for the insurer and uninsured population are expected to drive the critical illness insurance industry.

Critical Illness Insurance Market Segment Insights

Critical Illness Insurance Product Type Insights

The critical illness insurance market segmentation, based on product type, includes medical insurance, disease insurance, family insurance, and income protection insurance. The medical insurance segment held the majority share in 2023 of the Critical Illness Insurance market revenue. This is primarily owing to the growing development of new products by health insurance companies. Evolution in the market with the launch of new products by health insurers is creating a new trend in the market. Several companies are providing different policies, such as single disease packages that cover only one disease, which includes high blood pressure, diabetes, and cancer, that can be added to the regular critical illness insurance. However, family insurance is the fastest-growing category over the forecast period due to its cost-effectiveness as it provides cover to every family member on a single premium, driving the market growth of the critical illness insurance.

June 2021 - Anthem Inc. completed the acquisition of MMM Holdings Inc along with its Medicare Advantage (MA) Plan, affiliated companies and Medicaid plan. This acquisition will allow Anthem to serve Puerto Rico consumers with Medicare and Medicaid plans.

Critical Illness Insurance Application Insights

The critical illness insurance market data has been bifurcated by application into a heart attack, cancer, stroke, and others. The cancer segment dominated the market in 2023 and is projected to be the faster-growing segment during the forecast period, 2024-2032. This is attributed to the fact that critical illness insurance plans usually tend to cover cancer, which is severe or terminal, and many types of cancer that are generally treatable are included. Moreover, critical illness insurance covers the patient even with pre-existing ailments, including cancer. However, heart attack is a fastest-growing category over the forecast period owing to the increasing adoption of a sedentary lifestyle and the surging obese population with heart issues.

Figure 1:  Critical Illness Insurance Market, by Application, 2021 & 2032 (USD Billion)Critical Illness Insurance Market, by Application, 2021 & 2030 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

News: A new customized health insurance plan from Future Generali India Insurance was introduced in response to clients' rising resistance to adding standardized features in policies. Customers can create a unique insurance plan that meets their specific needs. Features like air ambulance, critical illness booster, maternity coverage, and accidental death coverage can all be added on-demand rather than required. The "DIY HEALTH" package will comprise a base plan with Seventeen features and twenty optional extras.

Critical Illness Insurance Regional Insights

By Region, the study provides market insights into North America, Europe, Asia-Pacific and Rest of the World. North America critical illness insurance market accounted for USD 19.79 billion and is expected to exhibit a significant CAGR growth during the study period. This is attributed to the rise in the number of patients suffering from life-threatening diseases such as kidney failure, cancer, heart attack, strokes, and modern lifestyle and the increasing prevalence of these diseases in the region. Further, the US critical illness insurance market held the largest market share, and the Canada critical illness insurance market was the fastest-growing market in the North America region.

Further, the major countries studied in the market report are: The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2:  Critical Illness Insurance Market Share By Region 2021 (%)CRITICAL ILLNESS INSURANCE MARKET SHARE BY REGION 2021 (%)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe critical illness insurance market accounts for the second-largest market share owing to the stringent federal laws stating that citizens should compulsorily have at least one insurance policy for health. Further, the Germany critical illness insurance market held the largest market share, and the UK critical illness insurance market was the fastest-growing market in the European region.

The Asia-Pacific critical illness insurance market is expected to grow at the fastest CAGR from 2024 to 2032. This is due to the increasing penetration of private providers in this region and central and state governments' growing launch of schemes. Moreover, China critical illness insurance market held the largest market share, and the India critical illness insurance market was the fastest-growing market in the Asia-Pacific region.

Critical Illness Insurance Key Market Players

Major market players are spending a lot of money on R&D to enhance their product lines, which will help the critical illness insurance market grow even more. Market participants are also taking various strategic initiatives to grow their worldwide footprint, with key market developments such as new product launches, mergers and acquisitions, contractual agreements, increased investments, and collaboration with other organizations. Competitors in the critical illness insurance industry must provide cost-effective items to expand and survive in an increasingly competitive and growing market environment.

One of the primary business strategies adopted by manufacturers in the  critical illness insurance industry to benefit clients and enhance the market sector is to manufacture locally to reduce operating costs. The critical illness insurance markets major players, such as AEGON Life Insurance Company Ltd., AXA Hong Kong, Legal & General Group plc, and others, are working on expanding the market demand by investing in research and development activities.

Liberty General Insurance Ltd. is a private general insurance enterprise headquartered in Mumbai, India. It is a joint experience among US property casualty insurer Liberty Mutual Insurance Group, Indian private investment fund Enam Securities, and Indian industrial conglomerate DP Jindal Group. In July 2020, Liberty General Insurance launched 'Critical Connect,' where one can choose from two programs for a sum insured ranging from Rs 1 lakh up to Rs. 1 crore. If the customer opts for plan A, they can choose critical illness insurance Bundles Covering 9, 25, or 43 critical illness insurance. Whereas plan B offers disease-specific bundles such as Heart Protect, Cancer Protect, Renoliv Protect, and Brain Protect. With this launch, the company has enhanced its offering to customers for critical illness insurance.

Also, Cigna is an American multinational managed healthcare and insurance enterprise based in Bloomfield, Connecticut. Its critical illness insurance subsidiaries are key providers of medical, dental, disability, life and accident insurance and related products and services, most of which are offered through employers and other groups. Cigna is incorporated in Connecticut. In April 2021, Cigna Corporation, in collaboration with Oscar Health Inc, announced the launch of Cigna + Oscar critical illness insurance to provide affordable coverage for small businesses in Connecticut. Covered employees under the plan will benefit from access to $0 cost 24/7 virtual doctor visits, behavioral health support, and low-cost prescription coverage.

Key Companies in the Critical Illness Insurance market include

  • China Life Insurance Company (China)

  • Allianz (Germany)

  • Ping An Insurance (China)

  • Aviva (UK)

  • Prudential (UK)

  • Aegon (Netherlands)

  • AXA (France)

  • Sun Life Financial (Canada)

  • Aflac Incorporated (US)

  • Huaxia Life Insurance Co. (China)

  • AIG (US)

  • MetLife Services and Solutions, LLC (US)

  • Zurich (Switzerland)

  • Star Union Dai-ichi Life Insurance (India)

  • United Healthcare Services Inc. (US)

  • Liberty Mutual (US), among others

Critical Illness Insurance Industry Developments

April 2021: Anthem Inc. announced the acquisition of myNEXUS, Inc. myNEXUS Inc is a home-based nursing management company that serves clinical support services to approximately 1.7 million Medicare Advantage members across the US.

Critical Illness Insurance Market Segmentation

Critical Illness Insurance Product Type Outlook

  • Medical Insurance

  • Disease Insurance

  • Family Insurance

  • Income Protection Insurance

Critical Illness Insurance Application Outlook

Critical Illness Insurance Regional Outlook

  • North America

    • US

    • Canada

  • Europe

    • Germany

    • France

    • UK

    • Italy

    • Spain

    • Rest of Europe

  • Asia-Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

    • Australia

    • Rest of Asia-Pacific

  • Rest of the World

    • Middle East

    • Africa

    • Latin America

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