The United States is known as the land of plenty and, indeed, we’re fortunate to live in our great nation. For many Americans, however, the word “plenty” also refers to the number of bills they receive each month. Our economy is slowly bouncing back but raises and bonuses are still hard to come by, making it hard for workers to set aside funds for inevitable rainy days.
A recent Bankrate survey revealed that 76 percent of Americans live paycheck to paycheck, which means the majority would have a hard time coming up with funds to finance unexpected bills. A flat tire, a broken water heater, a sick pet, a shattered window or any other sudden expense can leave families scrambling for funds — and those costs can seem minor when compared to the financial havoc wreaked by a serious illness or injury.
All of this financial turmoil has turned voluntary insurance, which once seemed like a “nice-to-have,” into a “must-have,” much like auto and homeowners insurance are musts for those who drive cars or own homes.
Voluntary insurance works hand in hand with major medical plans to help ensure individuals who are sick or hurt have the funds needed to help pay health-related costs their primary insurance might not cover, as well as other out-of-pocket costs. After all, when a medical event occurs, there are deductibles, co-payments and uncovered treatment costs to consider — not to mention the bills that continue to roll in even if an individual is too ill or injured to work.
According to the 2014 Aflac WorkForces Report, 49 percent of today’s workers have less than $1,000 on hand to pay out-of-pocket medical expenses and 66 percent would not be able to adjust to the financial costs associated with a serious injury or illness. Perhaps that explains why an analysis of data from sources such as the U.S. Census Bureau, the Centers for Disease Control and the federal court system showed that health care costs are the number one cause of bankruptcy filings.
Develop a Winning Voluntary Strategy
Many employers help workers cope with spiraling medical costs by adding an array of voluntary health insurance policies to their benefits options. This allows employees to decide what types of coverage they need and can afford. For example, 52 percent of workers who don’t currently have access to voluntary benefits through their companies say they’d probably apply for coverage if their employers made them available.
Once a company decides to add voluntary benefits to its roster of health insurance choices, what’s next? One strategy is surveying employees to identify their most-desired voluntary options and then offering a selection of the plans generating the most interest. Overwhelming employees with too many choices at once can be just as ineffective as not providing enough options to choose from. Most employers will find workers are interested in these types of voluntary policies:
This helps protect a worker’s most valuable asset: the ability to earn a living. Disability benefits pay a portion of an employee’s income while he or she is disabled and unable to work.
Life insurance is a high-demand benefit, especially in shaky financial times. It’s most appealing to employees who want to protect their families’ lifestyles if the worst should happen. Proceeds can be used to help pay immediate needs such as funeral expenses, medical costs and current bills and debts. They can also be used to help pay survivors’ future needs, including ongoing financial obligations, education costs and retirement expenses.
Dental coverage is a high-value proposition for several reasons: It’s often inexpensive, is closely tied to overall health, and many companies are discontinuing employer-paid dental coverage.
Accident insurance helps policyholders stay ahead of the out-of-pocket expenses that add up quickly after an unexpected health event, such as a broken bone, dislocated joint or laceration. Benefits can be used to help pay for emergency treatment, hospital stays and medical exams, as well as treatment-related transportation and lodging needs.
Critical Care and Recovery Insurance
This helps pay for treatment related to serious, life-altering events such as heart attacks, strokes, kidney failure and third-degree burns.
As workers struggle to save money, voluntary benefits represent a double win: They can help soften the blow of out-of-pocket medical costs for workers and, because premiums are employee-paid, they can be made available to employees with little or no effect on a company’s bottom line.
Health Photo via Shutterstock