Advisors can increasingly expect to find clients earmarking critical illness benefits to pay the costs of traditional and experimental medical techniques says Dr. Marius Barnard, the South African physician usually credited as the inventor of the product.

That compares with the more contemporary method of using CI benefits to cover mortgage payments and help fund a retirement plan after the onset of a critical illness.

Speaking to Investment Executive after his formal presentation at the second World Critical Illness Insurance Conference in Victoria, British Columbia, Barnard contrasted past and present applications of the product with his outlook for the future.

“I don’t think just (in) Canada, but all over the world. It’s a total new indication. We in the old days had this product for survival. We now have this product not only for survival, but also expensive medical treatments. Not only for stem cells and things like that. (In) the whole of medicine costs are escalating so fast that medical funding on its own is not enough and CI will be able to help,” says Barnard who himself faces an upcoming medical procedure requiring stem cell material costing worth $25,000. “But you need the policies now for the future.”

Currently, while the product is generally similar from country to country, “the thing that I find different is the reason to buy,” he says.

Barnard originally developed the product in South Africa in 1983, he says, “… not for medical treatment but because you’re going to survive after medical treatment. It was actually a product to care for you during the period of your survival,” because clients often survived after medical treatment, he says.

In a departure from what was then the norm, early CI clients in the United Kingdom frequently purchased the product as a form of mortgage insurance for reasons he says are unclear. “The English attitude was to get security of the house,” a client view that continues driving CI sales there more than in other areas of the world. Canadian clients appear to use the product for financial survival after a medical procedure and as a source of retirement funds as well as mortgage protection.

The U.K. development differed somewhat from Barnard’s original raison d’etre for developing the product. CI became a going concern because traditional life insurance only paid on the decease of the insured, but made no provision for survival, a more frequent outcome of serious medical trauma as medical science found new treatments and cures.

“With modern disease you don’t die, you survive but at a financial cost.” That equation became the motivation for advisors and clients alike, he says. Looking to the future, Barnard says, government’s ability to cover rising medical costs for all manner of traditional or experimental medicine is increasing threatened, leaving CI benefits as an option.

The second World Critical Illness Insurance Conference runs until Saturday, January 17 in Victoria. The third edition of the conference is tentatively scheduled for late Spring 2005 in Toronto.

“We’ve done the West Coast,” explains Alphonso Franco, Organizing Chair of the Conference, chief executive officer of the Victoria-based Critical Illness Insurance Centre. “Next, we want to go where the people are.”