A recent study revealed that more than half of U.S. adults report they’ve gone into debt in the past five years, because of medical or dental bills.
Of those currently in debt, 24% owe $5,000 or more. The same percentage say they currently have bills that are past due or they are unable to pay.
For many, long-term debt can trigger a cascade of long-term financial challenges. More than a third of those with health care debt (35%) say it has negatively affected their credit score, which can impair their ability to buy a house or a car. It can also make it much harder to save for retirement.
Life insurance companies believe that people shouldn’t have to choose between managing the costs of an illness or injury and managing savings. That’s why many offer products that will help people better handle their medical expenses and avoid incurring large debts.
Life insurers offer supplemental policies that can serve as a crucial financial lifeline for families by providing cash that helps them protect their household budgets. This coverage includes accident-only, critical illness, hospital indemnity, cancer/specified disease and similar plans.
It’s important to note that supplemental benefits are “in addition to” and not “in place of” medical health insurance. They provide families coast-to-coast with financial security when life takes an unanticipated twist.
Supplemental benefits can make a huge difference, by providing payments directly to policyholders to use at their discretion. So instead of falling into debt or cutting back on saving for retirement, families can keep current on their bills and maintain their long-term savings plans.
Life insurers frequently offer supplemental benefits through the workplace, often through group plans. But consumers can also directly buy the policies, which become part of a thorough financial protection plan.
Consumers aren’t just getting a policy; they’re also obtaining invaluable peace-of-mind. Rather than worry that their illness might force unpleasant financial decisions, policyholders can sleep well at night knowing that they will have financial support when they need it most.
Cindy Goff is Vice President, Supplemental Benefits and Group Insurance at the American Council of Life Insurers (ACLI), where she develops and implements state and federal public policy positions and strategies to ensure access to innovative financial protection products. She has also served as Director of Health Policy for Aflac and VP of Product Policy at America’s Health Insurance Plans.
