Even before COVID arrived in the United States, more than 36 million Americans were admitted into a hospital every year.
Most of them were hit with a bill, even if they had medical health insurance. Health insurance often has costly deductibles and/or co-pays. Plus, many of those hospitalized had limited paid time off. And that’s not even counting transportation and other related costs for their families.
The last thing people recovering from an illness or injury need is stress over unplanned expenses. Life insurance companies offer products that can provide peace of mind for families hit by these costs. Supplemental products from life insurers can serve as a vital financial lifeline for families by providing cash that helps people protect their household budgets.
The average cost of a 3-day hospital stay is around $30,000. That means that even with good major medical insurance, a person can usually expect at least a $6,000 out-of-pocket expense. But according to a recent Bankrate survey, 56% of Americans can’t even cover a $1,000 emergency expense with savings. That’s where supplemental benefits can make a huge difference, by providing payments directly to policyholders to use at their discretion.
Supplemental coverage includes accident-only, critical illness, hospital indemnity, cancer/specified disease and similar plans. Supplemental benefits can be paid out in a lump sum or they can be spread out, subject to the severity of an illness or accident.
Life insurers often offer supplemental benefits through the workplace, frequently through group plans. But the policies are also sold directly to consumers, who can use these benefits to build a comprehensive financial protection plan.
Consumers with supplemental coverage enjoy added protection from medical-related debt and from having to make difficult choices such as dipping into a college fund or missing a mortgage or rent payment in order to pay for unexpected costs when they are sick or hurt.
It’s important to note that supplemental benefits are “in addition to” and not “in place of” medical health insurance. Public policy that would build barriers to access would undermine an important piece of a family’s financial protection puzzle that can lessen the impact of unexpected costs due to a serious illness or accident.
Supplemental benefits are a clear example of how life insurers provide financial security to help American families when life takes an unforeseen turn.
Susan K. Neely was President and CEO of the American Council of Life Insurers (ACLI), the nation’s leading trade association determined to help families live better lives by achieving financial security and certainty. As president and CEO, Neely drove public policy and advocacy on behalf of ACLI’s member companies that represent 93 percent of industry assets and serve 90 million families. She is CEO Emeritus through December, 2024.
