Critical Illness Insurance - A Story Everyone Should Know
July 10, 2012| By Steve Rowley |
Region: North America
Everyone in insurance knows stories like the widow who would have nothing without the life insurance proceeds of her late husband’s policy, the construction worker who would be destitute without his disability payments, or the elderly lady who would be forced to leave her home and enter a nursing home if not for her home healthcare policy. These stories are important. They serve as reminders to us all that our jobs really do make a difference in the lives of others.
Critical Illness insurance has stories, too - stories about how this product made a difference in the lives that it has touched. But it’s much more than that. The very genesis of Critical Illness insurance is “its own” story. It is a story about a man who saw that science and medicine were keeping people alive, only to have them become financially destitute as a result of surviving their illnesses.
The story begins on the morning of December 2, 1967 as a small South African family leaves home to visit friends in Cape Town for Saturday afternoon tea. Not wanting to arrive empty-handed, they stop along the way at a road-side bakery. A few minutes later, as 25-year-old Denise Darvall and her mother exit the bakery and cross the street, they are struck by a passing motorist.
Denise’s mother is killed instantly, but Denise is rushed to a nearby hospital where, despite every effort, she is declared brain dead later that day. One can only imagine the pain felt by her father, who had witnessed the tragedy and was suddenly faced with the loss of both his wife and daughter. He was approached by a young Dr. Christiaan Barnard, who reportedly said, “We’ve done our best, and there is nothing more that can be done to help your daughter. There is no hope for her.” This led to Barnard making a bold proposal: that Mr. Darvall could do Barnard’s team and humanity a great favor if he would let them transplant his daughter’s heart. Darvell simply responded, “If there’s no hope for her, then try to save a man’s life.”
The following day, a team of 30 physicians operated for nine hours on Louis Washkansky. Louis had once been healthy. He had served in the military, and had led an active life of swimming, soccer, and weightlifting prior to the decline in his health. By 1967 he had been diagnosed as diabetic and had suffered three heart attacks that led to congestive heart failure. His doctors gave him only a few months to live and had talked with him about the concept of a heart transplant. This was more of a theoretical discussion since none had ever been done, and the odds of finding a suitable donor were slim. Young Denise Darvall was the perfect match - her unfortunate event provided the right donor, at the right time and the right place.
The transplant worked! Denise’s heart was able to beat new life into Louis Washkansky. Unfortunately, complications set in, and Louis died of double pneumonia on December 21, 1967. He had lived for only 18 days, but that was long enough to convince the world that a fully successful heart transplant was possible.
Over the next 15 years Dr. Christiaan Barnard and his brother Marius continued to perform transplants and treat countless other people with critical medical conditions. They understood that they must treat the whole person, and not just the disease.
Marius, in particular, was able to see the destructive financial results of having a critical illness and empathized with his patients. He witnessed the adverse impact on health and recovery when a person needed to work full time while undergoing cancer treatments. He saw lives shattered that should have been celebrating. Most importantly, he understood that if advances in medical science were going to be meaningful, he would need to find a way to treat or cure the financial ailments that plagued his patients.
Dr. Marius Barnard was now on a mission. Over the next decade, he searched for the right treatments for this problem. Eventually, he came to the conclusion that an insurance product was the only possible solution to this complex but important issue. He approached one insurer after another, tirelessly trying to convince them to develop a product. Success finally came when Crusader Life agreed to front this new product idea, provided they could get meaningful reinsurance support. We’re proud to say that Gen Re (at the time named Cologne Re) was one of the reinsurers who saw the need, believed in the concept and thought a product could be priced well enough to be both affordable and profitable.
The first critical illness insurance product was issued on August 6, 1983, and it covered heart attack, stroke, cancer and coronary artery surgery. Since then critical illness has migrated around the world and is now being sold in more than 50 countries. The product has grown, changed and matured since that first Crusader Life product was released, but it remains as important as ever. Despite these changes and improvements the product still holds a unique place in insurance. It was not created by an actuary from the “home office,” a marketing representative in the field or a “think tank” in a large corporation. Critical illness insurance was created, you could even say “prescribed,” by a physician who saw it as an essential component of treating the critically ill.
Stay tuned for more blog entries about Critical Illness insurance!