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Critical Illness Insurance Provides Vital Protection to Employees

by Inoventive Solutions
July 29, 2025

The typical family’s income slips by more than $12,000 in the year after a breadwinner suffers a critical illness such as a heart attack, stroke or cancer, according to a study by Metropolitan Life Insurance Company.

This reduction of income isn’t primarily due to lack of medical coverage. It is actually attributed to the inability to work and earn an income. The approximate out-of-pocket medical expenses add about $3,000 dollars of extra costs during the first post-diagnosis year.

Despite these side effects, MetLife found that almost half of Americans with full-time jobs did not even have $5,000 dollars’ worth of accessible savings to cover a major illness diagnosis. More than 28% did not have at least $500 dollars in savings. 

The MetLife study also showed that:

  • In the event of a medical emergency, two-thirds of American workers had three months or less in available savings.
  • Only one-fifth of women and one-third of men were “very confident” that a financial emergency could be handled with their rainy-day fund.
  • A little more than half of those with a full-time job were extremely or somewhat concerned about the possibility of a critical illness impacting the financial stability of their family.

The study concluded that many Americans are unprepared to deal with the short- and long-term loss of income and out-of-pocket expense that is all too often associated with critical illness. Another aspect of the study may reveal the reason so many are unprepared: every surveyed patient had medical insurance, but only 7% had critical illness insurance and only 4% had cancer coverage.

Critical illness insurance

The purpose of critical illness insurance is to provide a one-time or lump-sum payment to assist in offsetting the out-of-pocket expenses associated with certain critical illnesses.

Applicable critical illnesses may include an organ transplant, heart attack, stroke, cancer, loss of vision, burns, HIV, or kidney failure. The critical illness insurance is not a replacement for standard health insurance or disability insurance. The design is purely to supplement such policies. 

Only 28% of the surveyed full-time workers had heard of insurance for critical illness. However, from further questioning about critical illness insurance, the number might be even lower, as three out of every five patients seemed to confuse it with their standard health insurance policy – and one in five confused it with disability insurance or other government programs.

Voluntary employer-sponsored critical Illness insurance

While the study showed a clear theme that many Americans are monetarily unprepared for a critical illness, it also provided evidence that many workers are concerned about their lack of preparation.

By expanding employee benefits to include voluntary critical illness insurance or raising awareness about existing benefits, you are offering important financial protection to employees.

In other words, you can help bridge the gap between the cost of a critical illness and what standard insurance covers, which allows the employee to better focus on recovering and possibly returning to the workforce.

If you want to know more about voluntary critical illness coverage, give us a call.

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Deductibles Shift Drives Interest in Critical Illness Cover

by Inoventive Solutions
August 17, 2021

If you want to provide your employees with the one voluntary benefit that can give them peace of mind should tragedy strike, critical illness coverage is the answer.

Demand has grown for critical illness insurance over the last year thanks to the pandemic and as a result of employees taking on more of the cost burden in their employer-sponsored health plans.

According to the Kaiser Family Foundation’s “20120 Employer Health Benefits Survey,” the average deductible for self-only plans of all types was $1,644 in 2020, up from $917 a decade earlier.  And many employees have deductibles upwards of $6,000 if they are in certain high-deductible health plans, which have become increasingly common.

As a result, many employers have begun enhancing their voluntary benefits offerings to include critical illness or cancer coverage to help offset the risk for employees and increase satisfaction and retention.

Interest grows

In part, employee interest in critical illness insurance stems from the chain of events that may have cut back their benefits and caused their deductibles to skyrocket. They are looking for peace of mind should they be stricken by a serious illness.

In addition, advances in medicine and technology that have prolonged life also make critical illness coverage more attractive. 

Finally, the COVID-19 pandemic put into sharp focus just how quickly someone can be sidelined by a sudden and serious illness.

Consider that out-of-pocket costs for treating a critical illness can start at around $15,000 and climb from there, and that lost income can be as much as $60,600, according to a 2020 MetLife study.

In other words, battling a critical illness could be just the tip of the iceberg. If someone’s lucky enough to survive a critical illness, they may still suffer major financial damage due to high medical bills and restricted income. 

To stave off debt, some people dip into, or deplete, their retirement savings and end up paying extra due to resulting taxes, fees and reduced health insurance subsidies. 

However, other adults don’t even have enough, or near enough, of a nest egg saved to cover all the costs.

Enter critical illness coverage

Critical illness coverage provides a lump-sum payment that a policyholder can use for any expense if they’ve been diagnosed with a serious illness. 

Mostly, this insurance only pays out for one occurrence of a listed condition. And once that payment is made, the policy is terminated.

But insurers have started offering policies that cover a wider variety of conditions and allow beneficiaries to receive multiple payouts if they suffer from a reoccurrence or another condition entirely.

As a result, more employers are offering voluntary critical illness coverage. According to Mercer’s “2020 National Survey of Employer-Sponsored Health Plans,” more organizations are offering this insurance in a direct response to the COVID-19 pandemic.

And Willis Towers Watson’s “2021 Emerging Trends in Health Care Survey” found that 57% of employers polled were offering critical illness coverage to their staff in 2021, and that 75% were planning to offer it by 2022 or beyond. That’s an increase of nearly one-third. 

Often offering this coverage costs the employer nothing or very little. Call us for more information on this valuable benefit that more workers are demanding.

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