Few people expect a critical illness to happen to them, but when it does, it can turn life upside down, leaving a lasting impact on their health and financial well-being.
That’s why having access to critical illness insurance can be so crucial. Recently, health insurance premiums have been on the rise.1 At the same time, high deductible health plans have become common, making it harder for employees to rely only on their health insurance to help cover medical expenses.2
That’s where supplemental coverage like critical illness insurance from Wellfleet can help make an impact. Employees can get additional financial protection to help fill gaps left by their health insurance. Furthermore, employers benefit because critical illness coverage can be offered at no additional cost to the employer.
In this blog, we’ll discuss the value of critical illness insurance and why all health insurance brokers should offer it to their clients.
What is critical illness insurance?
Critical illness insurance pays a lump-sum benefit following the diagnosis of a critical illness. Some commonly covered illnesses include:*
- Heart attack
- Cancer
- Stroke
Critical illnesses also come with many non-medical expenses, such as food delivery, household and childcare help, and travel for treatment. Benefit payments are sent directly to the member, so they can use the money as they’d like, such as for medical bills, mortgage payments, or other expenses.
Considering how many employees opt for high-deductible health plans, critical illness insurance can help provide a buffer for them in case of a severe illness. This coverage can help protect employees and families from the financial burden of a critical illness, allowing them to focus on what’s important—their healing.
How critical illness insurance helps fill gaps in coverage
Between 2014 and 2023, the availability of high deductible health plans for private industry workers increased from 33% to 55%.2 Many Americans choose this type of health coverage because of the lower premium associated with high deductible plans.
However, HDHPs often fall short in offering financial support until the high deductibles and out-of-pocket maximums are met. That means members could be left with significant costs following the treatment for an illness like a heart attack or stroke.
In these cases, critical illness insurance can provide a lump-sum payment to help pay for expenses, lowering the overall cost to the member.
Impact on retention and recruiting efforts
Employers must keep up with the increasingly competitive employee landscape. Offering a competitive benefits package is a straightforward way to help boost employee satisfaction and retention. With 63% of U.S. workers indicating they’re likely to participate in voluntary benefits,3 the need for a high-quality critical illness insurance offering is clear.
Minimal direct costs to employers
Critical illness insurance brings value to employees and incurs minimal costs to employers, making it a win-win situation.
While employers can contribute to premiums if desired, they can also offer fully employee-paid critical illness coverage. In this case, employees benefit from a critical illness plan, while employers don’t have to take on another expense.
Learn 8 ways brokers can harness modern VB trends to produce better results for clients.
Example of how critical illness coverage works for employees
Let’s look at a hypothetical employee, Ryan, who has Wellfleet Critical Illness coverage through his employer.
Ryan’s Critical Illness plan: His plan is an enhanced benefits package with 100% payment for the initial occurrence and reoccurrences, as well as an unlimited max payout. In addition, his employer allows employees to choose a custom benefit amount, and Ryan chose the $15,000 level.
The situation: Ryan recently suffered a stroke while at work. Thanks to a couple of quick-thinking coworkers, he was rushed to the hospital and received the care he needed. While there, doctors performed an angioplasty, and now his prognosis is strong.
Benefit payout: Fortunately for Ryan, he had enrolled in his employer-offered Critical Illness plan at the $15,000 level. The benefit amount he is paid can be used any way Ryan likes, including toward his deductible and copays or mortgage and utilities, even to replace lost wages due to time away from work.
Benefits received:
$15,000 stroke (Base initial occurrence)
$1,500 angioplasty (Enhanced benefits package,10% partial benefit)
= $16,500 total Critical Illness benefit paid
What to look for in a critical illness insurance plan
Part of maintaining a strong and talented workforce is offering meaningful benefits. When comparing critical illness insurance plans, look for a plan that includes:
- High-quality coverage that covers the most common critical illnesses
- The ability to customize the plan and add more coverage and riders based on the desires of the client
- A smooth claims process and an efficient turnaround time
- Modern technology and an integrated single system for plan administration, such as Wellfleet’s Lighthouse platform
- Easy-to-understand educational materials for members
- The ability to use benefits however they like, including replacing lost income during treatment or recovery
- The option for employees to continue coverage at the same group rate if they leave their employer
- A reliable carrier with a strong financial rating and high level of integrity — like Wellfleet with an A++ financial strength rating from A.M. Best4
Learn more about Wellfleet’s Critical Illness Insurance
Learn how Wellfleet’s Critical Illness Insurance can help improve your benefit offerings. Connect with our team to create a customized plan for your client.
References
1 Johnson, SR. (2023, Oct 18). U.S. Health Insurance Premiums Rise 7%, Near $24K for Family Coverage. U.S. News & World Report. https://www.usnews.com/news/health-news/articles/2023-10-18/health-insurance-premiums-rise-7-in-u-s-survey-shows.
2 (2024, April 11). High deductible health plans and health savings accounts. U.S. Bureau of Labor Statistics. https://www.bls.gov/ebs/factsheets/high-deductible-health-plans-and-health-savings-accounts.htm.
3 Hart, W. (2022, Nov 18). Survey shows more workers are taking advantage of voluntary benefits from their employers. Benefits Pro. https://www.benefitspro.com/2022/11/18/survey-shows-more-workers-are-taking-advantage-of-voluntary-benefits-from-their-employers/.
4 For latest ratings, visit ambest.com
*Coverage depends on plan features
Wellfleet, Wellfleet Student, Wellfleet Special Risk, and Wellfleet Workplace are marketing names used to refer to the insurance and administrative operations of Wellfleet Insurance Company, Wellfleet New York Insurance Company, and Wellfleet Group, LLC (known in California only as Wellfleet Group, LLC dba Wellfleet Administrators, LLC). All insurance products are administered or managed by Wellfleet Group, LLC. Product availability is based upon business and/or regulatory approval and may differ among states.
WB-OCTOBER-2024-03
