Just as is the case with retirement savings, there’s a common theme when it comes to Americans and finances: We’re just not prepared enough. There’s a long list of data telling us we aren’t prepared for a rainy day—or barely even a week from now: A Bankrate.com survey found that only 24 percent of consumers have the recommended cushion of at least six months’ expenses set aside. The vast majority isn’t ready for contingencies; another 24 percent don’t have any emergency savings at all.
And while a majority of us are outspending our income and charging new plasma TVs instead of padding our savings, we’re getting hit hard by real problems, health care most often topping the list. In fact, medical expenses are the No. 1 reason for bankruptcies in the United States. And, according to a study in the American Journal of Medicine, among those bankruptcies, 78 percent of those individuals had health insurance. Yes, health care costs are big and the rate at which they continue to grow is unsustainable. But to survive this mess, we need to be proactive.
Part of the solution? Critical illness insurance. See the Top 5 critical illness claims
Consider this: A critical illness—such as a stroke, heart attack or cancer—can have a devastating effect on a typical household budget. And with most Americans admitting to not being financially prepared or financially fit, this is an obvious blow. “Many people assume their major medical insurance will cover everything if they suffer a heart attack or stroke or are diagnosed with cancer,” explains Randy Finn, assistant vice president of product development at Colonial Life. “They don’t realize they’re going to have a lot of expenses outside their major medical insurance.”
Facing one of those illnesses can reduce a family’s income by more than $12,000 in the first year alone, even if the patient has medical coverage, according to a MetLife study. Critical illness insurance is designed to help cover the medical expenses that health insurance won’t cover, such as deductibles, copays, noncovered prescription drugs, alternative treatments and out-of-town care, as well as nonmedical expenses, including mortgage or rent, utilities, car payments and insurance, health insurance premiums and lost income.
So have all these overwhelming stats finally begun to sink in for Americans?
Yes, if you believe industry experts.
Benefits Selling Magazine