Expect the Unexpected

Jan 13, 2022

[Life Insurance 101 Series: This series features IMPACT posts that detail the breadth of the industry’s reach and benefits provided to consumers.] 

More than 3.9 million Americans have been hospitalized with the coronavirus since August 2020.

For many if not most of the afflicted, the hospital stay resulted in unexpected expenses. Even those with medical insurance likely were financially impacted because many of those policies have high deductibles and/or co-insurance.

Life insurance companies offer products that can help families being slammed by unexpected costs not covered by medical insurance. Supplemental products from life insurers can serve as an essential financial lifeline by providing cash that fills the gaps in a policyholder’s coverage.

As the cost of health care continues to rise, these supplemental products are becoming more and more important.

Over the past five years, the average annual deductible among all covered workers has increased 53%. And about half of the consumers with a high-deductible health plan say it would be hard to afford the deductible.

COVID-19 is just one example of a costly unexpected illness. But even before the onset of the coronavirus, the likelihood of an unanticipated health concern or accident was higher than many realize. 

Per the Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2020, nearly 1-in-5 adults had major, unexpected medical expenses in the prior 12 months, with the median amount between $1,000 and $1,999.

A family’s housing, food and transportation expenses do not stop when a wage earner is hospitalized. The cash benefits from supplemental policies can be used to help a family pay their monthly rent or provide funds for travel and lodging when a family member is hospitalized far from their home. These benefits can be especially beneficial during extended hospital stays.

Supplemental benefits from life insurers can provide families with financial security and peace-of-mind when life takes an unforeseen turn. The pandemic has reaffirmed that no one can predict what the future will hold. But life insurers make sure everyone can prepare for it.

Cindy Goff

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.