Critical Illness Insurance Market Size

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.