Experts canvass broader access to critical illness insurance at Coronation

… Important to safeguard health, wealth

Cynthia Ezekwe

The financial impact of a critical illness such as cancer, stroke, heart attack, coronary bypass, kidney failure, or other similar conditions can be overwhelming, leading experts to emphasise the importance of critical health insurance as a key tool to protect oneself and family from serious health risks.

Critical health insurance provides financial protection in the event of a life-threatening illness by covering the costs of treatment and care, which can be costly and put a strain on the finances of the individual and their family.

The importance of critical illness insurance was highlighted by experts at a webinar hosted by Coronation Life Assurance Limited, a subsidiary of Coronation Insurance Plc. During the webinar, which was titled “Safeguarding Your Health: The Importance of Critical Illness Insurance,” the speakers emphasized how critical illness insurance can significantly improve an individual’s financial security in the event of a life-threatening illness.

In his keynote address at the webinar, Abdul-Rasheed Akolade, assistant director of Underwriting and Marketing at Africa Re, described critical illness insurance as an important component of any adult’s efforts to safeguard their health. He explained that critical illness insurance, sometimes called serious illness insurance, provides a lump sum payment if the insured person is diagnosed with any of the critical illnesses covered by the insurance policy. This can help to cover the costs of treatment, living expenses, and other financial commitments.

Akolade further explained that critical illness insurance is a type of insurance product that provides for the payment of a lump sum (called the sum assured) if the insured person is diagnosed with any of the specified critical illnesses as outlined in the policy, typically during the term of the policy and subject to the fulfillment of the policy’s other requirements. In other words, if an individual has a critical illness insurance policy and is diagnosed with a covered critical illness, the insurance company will pay out a lump sum as stated in the policy.

The insurance expert further explained that the concept of critical illness insurance was first introduced in South Africa in 1983 by Marius Barnard, who developed a product known as “Dread Illness Disease.” This first critical illness policy provided cover for four specific illnesses: cancer, stroke, heart attack, and coronary bypass surgery. This product was developed in response to the increasing incidence of these critical illnesses and the high cost of treatment associated with them. Since then, critical illness insurance has evolved to cover a wider range of illnesses and conditions, and is now available in many countries around the world.

“Critical health insurance is a vital part of an organised arrangement any adult may use in safeguarding his or her health. It provides a lump sum payment if the insured person is diagnosed with any of the critical illness conditions covered in the insurance policy. The benefit usually ranges from a lower to maximum range.The policy duration is also in ranges,’’  he said.

According to Akolade, critical illness insurance is a valuable wealth preservation and building tool. He explained that money spent on dealing with illness could be better spent on investments such as education, homes, businesses, or retirement savings.

Akolade stated that the amount payable for critical illness insurance is typically chosen by the insured individual (or enrollee). He also noted that, for ease of administration, there may be a minimum and maximum limit set by the life insurance company, for example, between N500,000 and N20,000,000.

He outlined some of the key benefits of critical illness insurance as follows:

-Financial protection: It offers adequate financial protection for the insured person.

– Peace of mind: It gives a perfect peace of mind to the insured person.

-No dependency on the employer nor children, especially after retirement: There is no need to depend on the employer and/or one’s children for funds once critical illness was already in place before being diagnosed for the critical illness conditions.

-Flexibility of arrangement: There is a complete flexibility in terms of the benefits and premium payment frequency.

Akolade stated that when making a critical illness insurance claim, a comprehensive specialist or doctor’s report is typically required. According to him, typical critical illness conditions covered by critical illness insurance include cancer, stroke, heart attack, coronary bypass, major organ transplants, and coma. He also mentioned that, at present, only a small number of life insurance companies in Nigeria are offering stand-alone critical illness policies. He encouraged the public to consider critical illness insurance as a way to protect their health in the event of a critical illness.

According to Adebowale Adesona, executive director of Coronation Life Assurance Ltd., there is a need for more education on the importance of medical health insurance in Nigeria. He highlighted the fact that the lack of a formal government-run health insurance scheme places an even greater burden on the country’s insurance industry, as it works to develop affordable products to help people manage their healthcare costs. He noted that the country’s growing population and the rise in the incidence of non-communicable diseases such as cancer and heart disease make it even more important for people to have access to affordable health insurance.

Adesona also stressed that while the National Health Insurance Scheme (NHIS) had made some progress in providing access to healthcare for low-income workers, it is still limited in its reach and does not adequately cover the cost of medical expenses for the majority of Nigerians. He pointed out that the private sector has a key role to play in providing affordable, comprehensive health insurance plans to the people.

Also speaking at the event, Yomi Sule, founder and managing director of Tillit MSME Microservices, emphasised the need to expand the health insurance pool to provide broader coverage for critical illness. Sule said the pool needs to be strengthened to provide more resources for those with critical illnesses. He also highlighted the importance of ensuring that critical illness insurance is made available and accessible to all, regardless of income level or social status.

Adekanla Desalu, a professional banker and financial advisor, noted that many people do not know how to plan for unexpected events, especially when it comes to their health. He stressed that this lack of planning is one of the main reasons people become financially insolvent when trying to pay for treatment for critical illnesses. He emphasised the need for critical illness insurance, which can provide financial security and peace of mind in the event of a serious illness.

“There is a lot more to be done in the insurance industry of Nigeria, and thankfully, we have social media now. We have digital media that will help us to propagate what insurance really is and help everybody to understand the benefits of adopting health insurance,’’he said.

Desalu noted that many people are reluctant to purchase insurance because they believe it is a waste of money. He urged insurers and the government to do more to educate the public about the importance of insurance. He called for transparency and flexibility in critical illness insurance products, stating that the cost of premiums and the terms of coverage need to be clearly stated and understood by potential policyholders. He also suggested that insurance companies should provide easy and convenient payment options, such as installment plans, to make critical illness insurance more accessible to a wider range of people.

In his closing remarks, Oluwatosin Ajiniran, head of claims at Coronation Life Assurance Limited, stated that wealth is a valuable asset and should be managed and preserved. He emphasised that good health is essential for wealth, as it enables people to live long, productive lives and generate more wealth.