Increasing numbers of young people are taking out medical insurance as they become ever more afraid of developing cancer, a new report shows.
The findings from market analyst Mintel found that the number of adults taking out critical illness cover, which pays out a lump sum for those diagnosed with a range of serious conditions such as cancer, has progressively increased over the last ten years.
Only about 11% of adults currently hold a critical illness policy, but Mintel predicts that the market will grow by 45% during the next five years to be worth £575m by 2006. Its findings show that 11% of adults without any medical insurance think critical illness cover is a good idea.
Cancer now accounts for more deaths in the UK than any other illness, with 35% of cancers diagnosed in people under the age of 65. Cancer-related conditions currently account for 55% of all claims under critical illness policies.
"Increasing survival rates have meant that securing the financial future in the aftermath of a serious health episode has gained greater importance," comments Paul Davies, senior financial consultant at Mintel.
At present, 24% of workers feel adequately protected against loss of earnings in the event of illness, which is a rise of 4% since November 2000, yet one in seven adults are concerned by the prospect of developing a serious health condition.
"Although there are signs that consumers are becoming more aware about protecting financial commitments, many people really do not like to consider a time when they are unable to work due to serious illness or even disability and adopt a 'head in the sand' mentality," said Mr Davies.
He added that while critical illness premiums have declined over the last few years due to increased competition in the market, this trend is likely to be reversed now as the number of claims proliferates.
Mintel suggests that insurers may now start to "cherry-pick" by rewarding low risk policyholders, such as vegetarians, who are considered to be at less risk of heart disease and various cancers.
