Demand for healthcare cash plans has increased massively over the last five years, according to a new report by market analysis company Datamonitor.
Subscriptions to cash plans have grown by about 40 per cent in the last five years, with 6.4 million people now covered.
And the report predicts demand will continue to grow over the next five years, with another 700,000 people expected to subscribe to a cash plan by 2005.
In comparison, individual private medical insurance (PMI) has grown at a far slower rate since 1995, from 6 million subscribers to 6.2 million.
But intermediaries are still unconvinced of the viability of selling cash plans.
Nimis principal Zig Malendewicz said: “Cash plans are not something I would offer because the amount of return is so small it would not cover our running costs.”
Report author James Allingham said: “With cash plans people can see themselves getting some money back on their premium in contrast to PMI where there is an ‘it won’t happen to me’ ethos. Cash plans can therefore appeal to a younger audience.”
The report also found the number of critical illness policies grew over the last few years compared with the total number of new long-term care policies, which decreased from 5,548 in 1999 to 4,895 in 2000.
And, according to Datamonitor, dental insurance schemes have grown 12.6 per cent a year over the last five years.