More people are choosing to buy critical illness cover (CIC) with the number of new policy sales having risen rapidly over the last few years. CIC has become more popular due to increased marketing activity by plan providers and because of decreasing premium rates. Mortgage-related business has tended to drive the growth in sales.

CIC policies tend to be sold on a term or whole-of-life basis. Term policies can cover less illness types compared with whole-of-life products and this is reflected in the differing policy premiums. CIC is often sold with other financial products such as mortgage payment protection insurance (MPPI) or life assurance. If a customer takes out a policy linked to their mortgage, the sum of critical illness cover required usually equates to the amount of the outstanding mortgage debt. Whole-of-life policies tend to cover the whole life of the person and are not necessarily linked to other financial products.

CIC is reportedly one of the most complicated, misunderstood and mis-bought policies in insurance.

The contents of this report focus on the significant dynamics and trends affecting the critical illness sector. In this report, CIC market data are included from the Swiss Re Term & Health Watch 2003 report, and GE Frankona Re. Additional sections of this report focus on the key providers in the market, premium dynamics, market size, CIC distribution channels and detailed research relating to consumers. Finally, the report predicts which issues will affect the CIC sector in the future, and forecasts the market in terms of premiums and new sales.