Interest in Critical Illness Coverage Grows as Deductibles Rise

IF YOU WANT to provide your employees with the one voluntary benefit that can give them peace of mind should tragedy strike, critical illness coverage is the answer.

Demand has grown for critical illness insurance over the last few years as more of the cost-sharing burden has been shifted to employees on employer-sponsored health insurance plans.

According to the Kaiser Family Foundation’s “2015 Employer Health Benefits Survey,” employees had to pay 255% more for their individual insurance deductibles in 2015 compared to 2006.

Additionally, the foundation reported that the number of workers with deductibles of $1,000 or more nearly doubled between 2010 and 2015 – increasing from 27% to 46%.

Since employees have taken on a higher cost-sharing burden, many employers have begun to enhance their voluntary benefits offerings to include critical illness or cancer coverage to help offset the risk for employees and increase satisfaction and retention.

Interest grows

In part, employee interest in critical illness insurance stems from the chain of events that may have cut back their benefits and caused their deductibles to skyrocket. They are looking for peace of mind should they be stricken by a serious illness.

In addition, advances in medicine and technology that have prolonged life also make critical illness coverage more attractive.

Consider that out-of-pocket costs for a critical illness can start at around $15,000 and climb from there, and that lost income can be as much as $50,600, according to a 2014 MetLife study.

In other words, battling a critical illness could be just the tip of the iceberg. If someone’s lucky enough to survive a critical illness, they may still suffer major financial damage due to high medical bills and restricted income.

To stave off debt, some people dip into, or deplete, their retirement savings and end up paying extra due to resulting taxes, fees, and reduced health insurance subsidies.

However, other adults don’t even have enough, or near enough, of a nest egg saved to cover all the costs.

Evolving products

Insurers have started offering new and/or improved critical illness products.

Mostly, this insurance only pays out for one occurrence of a listed condition. And once that payment is made, the policy is terminated.

Now, insurers offer polices that cover a wider variety of conditions and allow beneficiaries to receive multiple payouts if they suffer from a reoccurrence or another condition entirely.

As a result, more employers are offering critical illness coverage. According to Mercer’s “2015 National Survey of Employer-Sponsored Health Plans,” the percentage of employers with 500 or more employees offering group cancer or critical illness insurance increased to 45% in 2015 from 34% in 2009.

And a Willis Towers Watson survey predicts that 73% of these employers will offer it by 2018.

If one of your employees is in a fight against a critical illness, the last thing they should have to worry about is whether they have enough money to fund the battle. Be the one to stand up and offer this timely form of protection.