A 25-year-old non-smoking male has a 24 percent chance of having a critical illness (cancer, heart attack or stroke) prior to turning age 65. The same-aged male who smokes has a 49 percent chance according to the first National Critical Illness Risk Assessment Study published by the American Association for Critical Illness Insurance (AACII).
Cancer, heart attacks and strokes happen at all ages and most people are not prepared for either the emotional or financial cost. Nearly two-thirds of U.S. bankruptcies are the result of medical expenses and 78 percent of those filing for bankruptcy had health insurance when they were first diagnosed.
The national critical illness risk assessment prepared by Milliman, Inc., a leading actuarial firm, reveals the likelihood of incurring a critical illness for men and women at different ages up to age 55. According to the study's findings, women face less risk than men at all ages. Non-smoking women are at significantly less risk than their male smoking counterparts. While nearly half (49 percent) of 35-year-old male tobacco users will incur a critical illness before age 65, only 35 percent of female smokers will, according to the report.
The study reveals that 17 percent of non-smoking men and 36 percent of male smokers who reach the age of 55 without having a critical illness will be diagnosed with one prior to turning age 65. For women who reach age 55, some 12 percent of non-smokers and 23 percent of smokers will face a critical illness before reaching age 65.
Surviving a critical illness is likely today as a result of advances in emergency treatment and medical care. Survival comes with a high cost even for those with health insurance which often is accompanied by co-pays, high deductibles and exclusions for various new treatments." Michelle Dyke, actuary with Milliman, says, "There are substantial non-medical expenses associated with battling a critical illness including travel expenses to see specialists and lost wages that health insurance does not cover."
Critical illness insurance pays a tax-free, lump-sum cash benefit generally upon diagnosis of a covered critical illness. The first policies became available in the United States in 1996 and today some 600,000 individuals have such protection.
Summary of findings:
National Critical Illness Risk Assessment Study Conducted December 2009
Risk at designated age of having a critical illness prior to age 65
Editor's note from Milliman:
|At Age||Male Non-Tobacco User||Female Non-Tobacco User||Male Tobacco User||Female Tobacco User|
Upon first reading the above table, one might conclude that the risk of having a critical illness drops as one ages. However, the decline in percentage is reflective of the fact that 55-year-olds are only in the study for 10 years before they reach age 65, whereas 45-year-olds are in the study for 20 years. Since 45-year-olds are in the study twice as long as 55-year-olds, they have a higher probability of being diagnosed with a critical illness during the study period.
Critical illness was defined as life threatening cancer, heart attack or stroke. The definitions of diseases used in the study are typical of critical illness insurance policies being sold in the United States today. Skin cancer, other than malignant melanoma, and all in-situ cancers were excluded. Only the first occurrence of a critical illness was counted. If someone was diagnosed with more than one critical illness (i.e., heart attack and stroke), then only the first critical illness was included in the study. The assumptions used in the study are based on current incidence rates.
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