Group benefits and financial planning
Nonmedical benefits offered by employers can assist with healthcare costs not covered by other insurance offerings.
Consider these four facts about healthcare costs for group protection benefits in your financial plan.
Fact 1: Disabilities are common
It’s a challenge to budget for the unexpected. But disability happens more often than many think.
- One in four of today's 20-year-olds will become disabled before they retire.1
- Only one in five employees (19%) are very confident they would be able to cover their current expenses in the event of a serious illness or injury.2
Benefits paid by disability insurance replace a portion of an individual’s income if they’re unable to work due to a covered injury, surgery, accident, illness or even childbirth.
Fact 2: Savings may not cover injury cost
Injuries can mean unexpected healthcare expenses that outpace savings:
- Most covered workers have an aggregate, or family deductible, with average deductibles ranging from $2,245 for HMOs to $4343 for HDHPs with saving options.3
- Yet only 37% of Americans have enough savings to pay for a $500 or $1000 emergency.4
Unexpected injury-related expenses like emergency room visits, hospital admission, crutches and survey may partially covered by accident insurance.
Fact 3: Major illness can cause financial hardship
Even those with healthcare may have trouble paying medical bills. According to a Kaiser Family Foundation poll,5 one in five Americans with health insurance have to make financial and lifestyle sacrifices to handle the cost – including using up most or all of their savings, and spending less on food, clothing, and basic household items.
Pay out-of-pocket costs
Benefits from critical illness insurance may help offset out-of-pocket expenses for a broad range of illnesses and conditions. They can even pay for things that health insurance may not cover, like travel for specialized care or experimental treatment.
Fact 4: Everyone needs a plan for the future
Lincoln research shows there’s a lot of room for improvement when it comes to planning how to cover future healthcare expenses. In the event of a serious illness or injury, the top three methods6 individuals expect to use to cover out-of-pocket expenses are:
- Savings/checking account withdrawal 72%
- Credit card 37%
- 401(k) withdrawal 26%
- Cash benefits to help manage the impact of unexpected illness or injury on personal finances
- Group rates, which are often less expensive than individual policy rates
1Social Security Administration, “Disability and Death Probability Tables for Insured Workers Born in 1997,” Table A
2Lincoln Financial Group. “2017 Employee Benefits Study”
32016 Annual Employer Health Benefits Survey: Kaiser Family Foundation/Health Research & Educational Trust, September 2016, http://kff.org/report-section/ehbs-2016-section-seven-employee-cost-sharing/
4Money Pulse Survey, Bankrate/Princeton Survey Research Associates International, December 2015, http://www.bankrate.com/finance/consumer-index/money-pulse-1215.aspx
5The Burden of Medical Debt: Kaiser Family Foundation/New York Times Medical Bills Survey, January 2016,
6See footnote 2.