No longer than 12 weeks. That’s how long the majority (59
percent) of U.S. workers said they would be able to pay their bills
without a paycheck if they became sick and unable to work, according to
a new national survey from Cigna (NYSE: CI). Almost a third (29 percent)
said they would exhaust their resources in a month or less.
Cigna's survey was conducted among adults ages 25-65 living in the
United States who work full-time and who enrolled for employer-offered
benefits within the past two years. It examined views on different types
of benefits, including various kinds of voluntary benefits such as
disability, accidental injury, critical illness and accidental death
insurance. Voluntary benefits are commonly offered by employers as an
option for workers to purchase through payroll deductions, and are
designed to help consumers offset the financial impact of unexpected,
serious injuries or illnesses.
When asked about different types of employer-offered benefits that can
help provide financial protection, workers were significantly less
familiar with these benefits compared to dental, vision and life
insurance. However, nearly half of those who are not currently enrolled
in these benefits through their employer said they would be more
inclined to enroll in disability insurance (50 percent), critical
illness insurance (46 percent) or accidental injury insurance (45
percent) after hearing more about what they cover.
“Voluntary benefits are an important and growing part of many employers’
overall benefits package, and many of these products can offer financial
protection against the unforeseen,” said Mike Witwer, vice president
for Cigna's voluntary benefits business. “The survey shows that many
workers are worried about the financial burden of a serious illness or
injury or being without a paycheck because of one. With a little
homework, consumers can learn more about these benefits and how they can
fit into a personal financial protection plan.”
Convenience and Lower Cost Attractive to Consumers
Eastbridge Consulting Group recently looked at the availability of
voluntary benefits and reported that 77 percent of employers with 10 or
more employees offer at least one voluntary product and they anticipate
that number will rise as employers look for ways to control the cost of
benefits.1
Cigna survey respondents who said they are enrolled in any of the listed
benefits (other than medical benefits) through their employer were asked
what they liked about getting these benefits:
-
Three-quarters (73 percent) like purchasing through a payroll
deduction;
-
Seven in 10 (68 percent) like the convenience;
-
Nearly six in 10 (57 percent) like that it’s cheaper than what they
can find elsewhere; and,
-
About a third (36 percent) said it’s easier for them to manage their
budget.
Younger Workers Have Gap in Understanding
In Cigna's survey, workers ages 25 to 34 were least familiar with the
different types of employer-offered benefits they were asked about
including disability, accidental injury, accidental death and critical
illness insurance.
“With young families and not as much time to build up savings they could
access, younger workers might be at the most risk for significant
financial impacts of being out of work or paying unanticipated medical
bills because of an injury or illness,” Witwer said. “Helping these
employees learn more about financial protection benefits is an important
step for us and for our employer clients.”
U.S. Workers Worried about Financial Security
The survey revealed that the financial impact of a serious illness or
injury is on workers’ minds. Over eight in 10 (84 percent) agreed they
had ever worried about it and three in 10 said they did so at least once
a month or more often. “Running out of money” was cited as the greatest
fear about not having enough insurance if they or someone in their
immediate family had a serious injury or illness.
Even with comprehensive medical coverage, a major illness or injury
typically creates unanticipated out-of-pocket medical costs for
treatment and recovery. Meanwhile, household expenses such as rent or
mortgage, utility costs, food and child care must still be paid.
Nearly six in 10 respondents (58 percent) reported they would be at some
level of financial risk if they became sick and unable to work for a
month, in line with the U.S. Federal Reserve Board’s findings that 68
percent of adult Americans do not have savings set aside for emergencies.2
What’s more, the potential for financial disruption may be more common
than some people think. For example, according to the National Safety
Council, approximately one in eight Americans seek medical treatment for
accidents every year.3 In December of 2012, there were more
than 2.5 million disabled workers in the United States in their 20s, 30s
and 40s receiving Social Security Disability Insurance benefits.4
Meanwhile, one in four of today's 20-year-olds will become disabled
before they retire.5
The survey asked people how they would handle non-medical expenses if a
serious injury or illness struck them or their immediate family:
-
Most (72 percent) consider “personal savings” as their primary
resource to help them through the unexpected, though young people were
more likely than older people to say they’d borrow from family or
friends.
-
Half (53 percent) would look at options for borrowing or withdrawing
from a 401k/IRA or other retirement savings
-
About a third (34 percent) said they would call on additional
disability insurance. However, fewer than 20 percent said they would
borrow from a life insurance policy (17 percent), accidental injury
benefits (16 percent), accidental death and dismemberment benefits (15
percent) or critical illness coverage (11 percent).
“Benefits can seem complicated. Cigna focuses on providing customers the
tools and resources they need to make educated decisions,” said Witwer.
“We’ve seen that when customers have access to easy-to-understand
information, they’re more likely to make the choices that best meet
their individual needs.”
For example, in 2011 Cigna launched Smart
Benefit ChoicesSM, a web-based educational resource that
uses true-to-life, interactive scenarios that allows voluntary benefit
customers to select a benefit plan that matches a personalized profile
reflecting their individual situation.
About the Survey
The survey was conducted by ORC International, not affiliated with
Cigna, using an online methodology and consisted of 1,501 interviews
among 25-65 year olds living in the U.S. who work full time and have
enrolled for employer offered benefits in the past two years. Interviews
took place September 9 - 17, 2013. Respondents for this survey were
selected from among those who have volunteered to take part in market
research online surveys and polls. Quotas were enforced to ensure a
distribution of key demographic information in order to analyze the data
among key subgroups.
About ORC International
Leading global market research firm, ORC
International uniquely integrates its people, methods, technology
and insights to address the most strategic needs and challenges of its
clients. Since its founding in 1938, the firm has maintained a passion
to drive clients’ growth by providing insightful and innovative research
solutions in the areas of Employee, Customer, Markets and Products and
Strategy. The company is a founding member of CASRO and a partner of CNN
on the CNN|ORC
International Poll since 2006. To learn more about ORC, visit www.ORCInternational.com.
About Cigna
Cigna Corporation (NYSE:CI) is a global health service company dedicated
to helping people improve their health, well-being and sense of
security. All products and services are provided exclusively through
operating subsidiaries of Cigna Corporation, including Connecticut
General Life Insurance Company, Cigna Health and Life Insurance Company,
Life Insurance Company of North America, Cigna Life Insurance Company of
New York and their affiliates. Such products and services include an
integrated suite of health services, such as medical, dental, behavioral
health, pharmacy and vision care benefits, and other related products
including group disability, life, and accident coverage. Cigna has sales
capability in 30 countries and jurisdictions, with approximately 80
million customer relationships throughout the world. To learn more about
Cigna®, including links to follow us on Facebook or Twitter, visit www.cigna.com.
1Employers Are Embracing Voluntary More Every Day,
Eastbridge Consulting Group, Inc., 2012 study. http://eastbridge.com/outside/2013/winter6.html
2 U.S. Federal Reserve Board, Survey of Consumer Finances,
2010
3 National Safety Council, Industry Facts Summary 2011
4 U.S. Social Security Administration, Disabled Worker
Beneficiary Data, December 2012
5 U.S. Social Security Administration, Fact Sheet February 7,
2013
Copyright Business Wire 2013