MetLife, in a recently released study, concluded that nearly one in two Americans has less than $5,000 to tap into in the event of a major illness. What’s worse is that the same American will lose an average of $12,000 during the first year of a medical crisis. This includes having the necessary medical coverage.
“The MetLife studies found that many people are unprepared to cope with the toll of lost income as well the out-of-pocket medical expenses and other illness-related costs,” said Clea Barth, vice president, Critical illness Insurance Products, MetLife. “A critical illness can have a long-term impact – even three to five years after being diagnosed, 60% of people experiencing these serious medical situations are still incurring out-of-pocket expenses.”
I know a couple who lost two babies during child birth. Their health insurance didn’t cover the births/deaths 100%. So they were stuck with sizable bills—twice—for years afterwards. I can’t even begin to imagine the anger and sadness as a result.
According the rest of the article, we’re supposed to have Critical Illness Insurance (CII).
CII can complement existing medical coverage and other financial protection products by providing a lump sum payment to help offset the spike in out-of-pocket expenses resulting from certain critical illnesses, such as cancer, stroke, heart attack, major organ transplant, or kidney failure.
So, according to this study, we should have $12,000 at a minimum in savings. In my personal finance venture, I’m aiming to save at least 6 months of living expenses— thankfully quite a bit more than suggested here. And that’s 6 months of zero income.
I’m not sure the difference between CII and short/long term disability so I won’t comment here. But this may definitely be something worth looking at to supplement current savings. And yes, I realize the study was released by an insurance company.
Reference: Met Life Press Room