The U.S. business group of Sun Life Financial Inc. released “Well- Placed Fears: Workers’ Perceptions of Critical Illness,” a white paper based on responses from over 4,000 U.S. workers about the potential costs of a critical illness. In a release, the company noted that the report found that many workers feared the financial impact of a critical illness even more than dying from one. Such concerns may be driven by a rise in out- of-pocket health care costs, as employer-sponsored health plans require workers to shoulder an ever-rising share of medical costs.
To highlight this trend, Sun Life Financial 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). Sun Life’s per-person out-of-pocket cost estimates for critical illness are based on claims data from over 300,000 of the firm’s Stop-Loss insurance claims.
“Our findings suggest that benefits brokers and HR decision makers might especially want to consider offering critical illness and cancer insurance if their employee base contains a significant group of women, workers age 40 to 50, or singles,” said Bob Klein, Senior Vice President of Sun Life’s Voluntary and Multiline divisions. “Further, our research shows that workers in the transportation, utility, business/professional services, and manufacturing industries also seem particularly concerned with the financial impact of a critical illness.”
According to the Sun Life 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.
-Most workers in the transportation, utility, business/ professional services, and manufacturing industries fear the financial impact of a critical illness more than they fear death.
Other key findings:
-Over one-third (36 percent) of workers believe they have critical illness coverage, when industry estimates suggest that under 5 percent of the U.S. workforce actually have 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.
-Over 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.
-12 percent of workers who experienced a critical illness declared bankruptcy and 11 percent lost their homes.
“Sun Life’s 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,” added Klein. “Based on these findings, we think many workers will want to explore ways to increase their financial security in case they experience a critical illness.”