An illness away from financial ruin

By Brian Summers

Colonial Life


In 2009, an estimated 1.5 million Americans filed for bankruptcy. And according to CNNHealth.com, nearly 60 percent of those bankruptcies are due to medical bills. In 2001, 46 percent of bankruptcies were related to medical bills. In 2007, that number jumped to 62 percent.

Too many brokers still look at voluntary benefits as an afterthought. "Unless the company asks, then were not going to mention it," is the mantra of many brokerages. I can't tell you how many times I've called a business and spoken to the decision maker, who then gave me the brokers' name to contact. I call the broker and nine times out of 10, I am told that the company is not interested. My personal favorite is when I am told that they will contact the company and if they are interested they'll call me back. Never mind that I just got off the phone with the decision maker.

I want you to take a moment and think right now. How many of your clients' employees are an illness or accident away from financial ruin? How many of them live paycheck to paycheck and cannot afford to miss one?

One of the biggest myths in voluntary benefits is that the employee cannot afford the coverage. This could not be further from the truth. They cannot afford not be covered. Someone making $24,000 per year is eligible to receive around $800 per month in disability benefits. Depending on the company you choose to work with, the cost will be in the area of $4.89 to $6.55 weekly for a 6 month policy with a seven- to 14-day elimination period.

That is less than a dollar a day. That is less than we pay for coffee or a bagel. Enrollments with low compensated employees can be challenging, but I am here to tell you that they can also be very rewarding. These employees do not have financial consultants. They generally do not think of speaking with someone from their bank to plan their financial future, and most do not participate in a 401(k) because they cannot afford to wait that long for their money. The first time that employee makes a claim though, and is able to pay his bills is a rewarding experience for us all.

Lower compensated employees generally have minimal health insurance, do not schedule regular physicals and only go to the doctor when they are truly sick.

What lower compensated employees do understand is that the risk of illness or accident is prevalent and that without a paycheck, they will not be able to put food on the table or pay their rent. I'm sure all of us have been asked to donate to someone who has fallen upon tough times because of an accident or illness in the past.

I don't know how many of you watch "Extreme Makeover" on Sunday nights, but most of the time these families fell on tough times due to an illness or death. One particular episode featured a father who had cancer, and his house was falling apart. This man died days after they completed the home for his family. Was it a coincidence that this man finally gave up the fight for his life after knowing that his family was being taken care of after fighting the illness for so long. It was certainly a tearjerker episode, and it highlights what we should be doing every day, making sure that our client's employees are at least offered the opportunity to protect their financial futures.

With online bill-pay and voluntary carriers offering to reconcile the invoices for your clients, it has never been easier to complement the current health package you offer your client by offering voluntary benefits.

Worksite marketing, voluntary benefits, supplemental benefits -- no matter what you call them, they are becoming a more integral part of an employer's "health package" every day. Today's employees are looking for logical choices, flexibility, and affordable solutions. At the same time, health insurance premiums are increasing rapidly. To save, more employers now offer medical plans that include high deductibles and higher co-pays. Voluntary benefits can help and provide the solution that so many of you are looking for out there.

The most valuable asset a person has is their income. More people than ever are living paycheck to paycheck. Without it, what happens?

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