Critical Illness Insurance: Worth The Money?
A lot of workers are taking advantage of their employer’s health insurance plans. Costs usually increase steadily over the years and people are accustomed to this. However, premiums are rising – add in growing deductibles and medical costs are becoming a major problem, even for customers with high quality coverage. An increasing number of employers are choosing to offer a new product called ‘critical illness insurance’. This type of health insurance is designed to fill some insurance gaps caused by injuries and illnesses that are proving very costly. The question is, is critical illness insurance the right decision for health insurance customers? Health care costs have been rising faster than the rate of inflation. Employers have been forced to make their employees cover some of the costs out of their own pocket. The total employee share of health care was around 34% in 2011. Now, in 2013, the number has risen to 37%, according to a recent survey by Towers Watson.
In 2013, for every £644.70 in health care expenses, employees are having to pay £237.90 in premiums – in other words, out of pocket costs. The Towers Watson report has predicted the average employee premium contribution for 2013 will be £1861.91, an 8.7% increase from 2012. J. Keith Pellerin, vice president of management and innovation at Aflac, said: “There is a unanimous opinion that the cost burden is shifting to the employee. And that burden will likely weigh more heavily on older employees, who tend to use health care more than their younger counterparts.”
As these insurance trends continue, experts say that it is no coincidence that the number of critical illness insurance plans being taken out is increasing. This type of cover pays out a lump sum if the policy holder gets a specific, serious problem. This includes cancer, heart attacks and strokes. The big pay out can be used to pay for expensive medical costs, treatments and surgeries that would otherwise be out of reach to the average consumer. 35% of mid to large size companies in the US are offering critical illness cover, Towers Watson also revealed. In 2002, only 12% of these companies were offering the cover, an increase in 23%.
James Savery, 08 August 2013