Today, more people have health insurance than ever before in our country's history. Love it or hate it, health care reform has resulted in an estimated 20 million people moving under the health insurance umbrella, according to a recent report by the Department of Health and Human Services.
But for many people — even those with good medical plans through their employer — that umbrella is either too small or has a few leaky spots.
That's especially true when it comes to a serious illness such as a heart attack, stroke, or cancer. Today's high-deductible health plans, coinsurance, and copays can leave employees with significant financial exposure before insurance covers a dime. Add in related costs that medical insurance won't cover — travel to and from therapy and specialist appointments, child care during treatment, lost income for missed time at work, adaptive devices or home modifications — and the tab can grow rapidly.
|Americans at risk
It's not all bad news: The death rate from heart disease has dropped significantly in the past decade, according to the American Heart Association's 2016 Heart Disease and Stroke Statistics Update. But the burden and risk factors remain alarmingly high. The report estimates nearly 86 million Americans are living with cardiovascular disease, including nearly half of all African-American adults. Someone in the U.S. has a stroke every 40 seconds. And treatment is expensive: The direct and indirect costs of cardiovascular diseases and stroke — including medical bills and lost productivity — total nearly $317 billion a year, the report says.
And this comes at a time when American consumers are already stretched thin. A recent Federal Reserve Board survey found nearly half of American consumers would need to borrow or sell something to pay for a $400 emergency — never mind thousands of dollars in medical bills.
|A simple solution
You can help your clients provide stronger financial protection for their employees by bringing critical illness insurance to the table. This type of coverage has been available as a workplace benefit for decades but still isn't widely known.
Critical illness insurance complements major medical coverage by helping pay the often significant costs of treating and recovering from a serious illness. It's a simple and straightforward type of coverage that's easy to explain and understand: It pays a lump-sum amount — typically from $5,000 to $100,000, depending on the coverage purchased — if the insured is diagnosed with a covered illness. Those illnesses may include heart attack, stroke, end-stage renal failure, coronary artery bypass surgery, major organ failure, and sometimes cancer.
|A growing appetite
Critical illness insurance still eats up a relatively small slice of the worksite benefits pie, but the appetite for it has grown tremendously in recent years. Worksite sales of critical illness insurance jumped 25 percent from 2014 to 2015, according to Eastbridge Consulting Group (U.S. Voluntary/Worksite Sales Report, April 2016). That's more than double the sales growth of any other product. Critical illness and cancer insurance sales together formed 12 percent of the worksite market last year.
|Not the “new cancer”
With this kind of sales growth, it might seem like a good move to replace cancer insurance in your portfolio with critical illness, but that's a misperception. Although many critical illness plans also offer cancer benefits, the two products meet different needs.
Traditional cancer insurance offers longer-term protection because cancer treatment and recovery can take years. Critical illness plans will cover a wider range of illnesses, with an immediate, though more limited, benefit. There's a need for both products in the market. And when your clients offer these products as voluntary benefits, it allows their employees to select and pay for the coverage that best meets their individual needs.
|Affordable protection for a critical need
Critical illness insurance can be a very affordable part of an employee's financial safety net. For example, a 35-year-old can buy $25,000 worth of individual coverage for less than $15 a month. A married employee can buy two-parent coverage for a bit more, about $25 a month (rates vary by state and carrier). The benefits are paid directly to the employee to use as needed, and aren't coordinated with major medical or other insurance. The lump-sum benefits help with immediate costs so the employee can focus on recovery and not on paying the bills.
You don't need to be an expert in critical illness insurance to help your clients make this important coverage a part of their employee benefits package. Partner with a benefits provider with expertise in this product and watch your portfolio — and business — grow.
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