SMART MOVE: The Cost of Critical Illness

by Patrick Miller, CBLife, The Club’s Insurance Partner

A major insurance company’s financial report reveals workers’ concern for costs of critical illness – many fear the financial impact of a critical illness more than dying from one. The report also said that cancer is the most dreaded critical illness.

The report was based on responses from 4,000 employees.

Such concerns may be driven by a rise in out-of-pocket healthcare costs, as employer-sponsored health plans require workers to shoulder an ever-rising share of medical costs.

To highlight this trend, the insurance company included in its report estimates of per-person out-of-pocket medical costs for individuals covered by health insurance who experience a critical illness, including cancer ($6,740), stroke ($17,680), and heart attack ($14,234). The per-person out-of-pocket cost estimates for critical illness are based on claims data from more than 300,000 of the firm’s stop-loss insurance claims.

According to the insurance company’s critical illness white paper:

  • Half of all workers, especially women and younger workers, cite cancer as their most dreaded critical illness.
  • Most workers age 40 to 50 fear the financial impact of a critical illness more than they fear death, especially single workers, single women, and single parents.
  • Of workers age 22 to 39, most single parents and single women earning under $50,000 fear the financial impact of a critical illness more than they fear death.

Other key findings:

  • More than one-third (36 percent) of workers believe they have critical illness coverage, when industry estimates suggest that fewer than five percent of the U.S. workforce actually has critical illness insurance coverage.
  • Two-thirds (66 percent) of workers who personally experienced a critical illness had to make financial sacrifices to meet uncovered medical or non-medical costs, despite owning health insurance.
  • More than one-third (37 percent) of workers who survived a critical illness found themselves out of work for four months or longer.
  • Tapping emergency funds or dipping into long-term savings were the most common financial sacrifices made by workers who experienced a critical illness.
  • Twelve percent of workers who experienced a critical illness declared bankruptcy, and 11 percent lost their homes.

The research on critical illness underscores that even if you have robust health insurance coverage, a significant health condition such as cancer, heart attack or stroke can divert a significant chunk of money from your savings, or in some cases, cost you your home.

Based on these findings, it’s important for employees to explore ways to increase their financial security in case they experience a critical illness.

Club partner CBLife offers a plan that can pay a cash lump sum on the initial diagnosis of specified critical illnesses. Money is paid directly to you to be used wherever you need it. Ask your Club Counselor for details. Contact CBLife at (888) 443-8829.

CBLife is The Club’s partner for four areas – life insurance, critical illness insurance, retirement income and accident medical expense insurance. Currently the Club offers three CBLife products: the Security Builder Plan, the Timber Ridge Critical Illness Plan and the Accident Medical Expense Plan. Ask your Club Counselor for details.
You can contact CBLife at (888) 443-8829.