The History

Critical Illness Insurance was developed by Dr. Marius Barnard (the brother of Christian Barnard, the doctor who performed the first successful open heart transplant surgery) in South Africa in 1983. Dr. Barnard saw an need for insurance that paid a "living benefit" to those who survived a major illness to offset lost income and pay additional expenses.

It is inspiring to hear him tell stories of delivering a Critical Illness benefit check to the wife of a farmer who had a heart attack (they would have lost their farm without the Critical Illness benefit payment), or to a young, single mother who had breast cancer (and couldn't afford the medical treatment and the after-treatment expenses without the benefits paid from her critical illness policy).

He is a consultant to Canada Life in Canada and had an impact on the design of their product

While Critical Illness Insurance was introduced in Canada five years ago which is realatively early for generating statistics. However, it has an established track record in South Africa, United Kingdom, Australia and Japan. Because of its broad appeal, Critical Illness Insurance is very successful wherever it has been introduced: In 1987 Critical Illness plans were successfully launched in England.

More than 70 U.K. insurance companies sell a Critical Illness policies and more critcal illness insurance is sold in the UK than life insurance. This is primarily due to the linking of critical illness insurance and mortgage insurance. This makes sense as 46% of forclosures in Canada are due to major illnesses. Critical Illness was introduced in Australia in 1990 and almost all Australian life insurance companies now offer a Critical Illness policy.

They recently introduced a Critical Illness policy in Japan that only covers heart attack, stroke, and cancer. Over 500,000 policies were sold in just 10 months and there were over 6 million policies sold by the end of its fourth year!