A study released this week by Washington National Institute for Wellness Solutions says that the preponderance of middle-income Americans is financially unprepared for a critical illness diagnosis. A full 90%, IWS reports, lack confidence that they have enough savings to cover emergencies and the long-term implications of serious illness.
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Out of 1,001 survey participants between the ages of 30 and 66 and annual household incomes of $35,000 and $99,999, 75% have less than $20,000 in savings. Half has less than $2,000 in savings and a quarter has no current savings.
One-fourth of respondents just “don’t know” what resources they would use to help offset their expenses, IWS says. Others would use credit cards (28%) or loans from friends and family (23%) or financial institutions (19%) to help cover what insurance doesn’t.
Americans, at least, understand how exorbitantly expensive critical illnesses can be. Forty-five percent believe they would never recover financially from a battle with
Barbara Stewart, president of Washington National Insurance Company says it’s important for employees to educate themselves about the real-life costs of critical illness. “Find out what your current insurance will — and will not — cover, and then assess your overall financial health. Identify the gaps between the resources you would need and the options already available to you,” she says.
Indeed, very few middle-income Americans have had those crucial conversations about critical illness financial planning, IWS reports. Most (60%) have not discussed finances in the event of a critical diagnosis with a loved one or adviser and 88% have not spoken about potential care-giving options.
