Critical-illness insurance is flying under the radar relative to other voluntary benefits, but a new MetLife white paper seeks to raise the product’s altitude among plan sponsors by showing how it adds financial protection and outlining steps to obtain the right amount of coverage.

Critical Times Require Critical Solutions suggests that medical and disability income coverage may not be enough in the event of a serious illness, noting that on average it costs $35,500 to recover from a critical illness, most of which is linked to lost income.

The report also noted that just 16% of working Americans surveyed feel confident they could pay for a medical emergency and as many as 40% live paycheck to paycheck.

"When faced with a critical illness, many individuals are surprised that their medical coverage may not address the full financial consequences of their sickness," Clea Barth, vice president of critical-illness insurance products for MetLife, noted in a news release on the white paper.

"A lump sum benefit provided by critical illness insurance can help mitigate the spike in expenses that can result from deductibles, co-insurance, uncovered expenses and annual benefit maximums. However, critical-illness insurance doesn’t yet have high visibility within employee benefit offerings because there’s still considerable lack of awareness surrounding this product," she adds.

Just 28% of full-time employees surveyed by MetLife have heard of CII and most confuse it with health insurance, disability income insurance or government assistance. But once the product features are explained, about 75% of employees who don’t have CII or never heard of it find the concept appealing.

Most are even willing to pay the entire premium, and when CII is offered, MetLife research shows that it can burnish the perception of an employer.

To maximize employee participation in a voluntary CII plan, MetLife recommends that employers and their broker partners promote the benefit as supplement to medical and disability income coverage as part of a health care version of the proverbial three-legged stool.

Other suggestions include a need to improve communications by illustrating how financial protection benefits build a strong personal safety net and keep the product offering simple.

The white paper features data from two online surveys of more than 1,000 U.S. adults apiece that MetLife conducted to gauge the awareness of CII and financial impact that a critical illness can have on a typical U.S. household.

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