Critical illness insurance did not exist in the USA long ago. There was a type of insurance known as the cancer insurance. It covered some types of cancers, alike critical illness which covers certain critical illnesses. Cancer insurance had been in the USA for many years. It was during the year 1989 that a critical illness product was firstly launched in the USA by Jackson National Life. The critical illness policy lacked benefits, as it was the case when firstly introduced in the UK. It covered only around 5 critical illness conditions with about 25 percent acceleration of the life benefit. The product sold well during the first two to three months but then came to a slowdown.



The slowdown could have arisen as Jackson National Life sold the critical illness policy in the broker market. The broker market at that time had the tendency to be guided by whatever was new. Therefore, when a new product came into the market, critical illness policy was left behind. The policy may still exist and could be sold in the USA but under a different form. (Source: Health Care Conference, 2000)

Moreover, then came the American Physicians Life’s policy (APL). This type of critical illness policy may still be sold in the USA. But sales may have been considerably low. There may be three reasons that could explain the poor sales of this critical illness policy. Firstly, APL was only licensed in 8 states and could be seen as a niche provider. Secondly, the policy was based upon the critical illness policy in the UK and thus turned out to be ineffective for the US market at that time. Finally, the APL had been sold to a finance group which owned the American Founders Life (AFL). AFL also had a critical illness contract but sales had as well been meager.

The attempts to sell an effective critical illness policy over the US market did not stop here. Bankers Life & Casualty came with the only standalone critical illness policy. The US market did not respond positively to change. Again, sales had been relatively low. However certain problems may explain the lack of growth of critical illness cover in the USA. There are many states in the USA. Thus, each state has its own law which also regulates insurance separately. Therefore, if critical illness policy issued by a company is recognized in only a few states, many people may be left unaware as it may not reach them easily. The success of critical illness insurance in the UK may explain everything as laws and regulations may have been set only by one authority as compared to the USA.

Furthermore, critical illness insurance may have been considered as another form of cancer insurance in the USA. Cancer insurance had not been successful in the USA as it did not offer cover for all types of cancers. As a matter of fact, its benefits may also have been slight.

Looking at critical illness insurance in the USA, we can see that this product had not been as successful in the UK. The direct sales forces in the UK may have led critical illness insurance to the status it now holds in the market.