Americans Not Financially Prepared to Face Critical Illness According to National Survey; One in Four Don't Know Where They Would Access Needed Funds.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- MetLife today announced results of its "Critical Illness Financial Impact" survey which uncovered a financial protection gap for individuals. This gap results from a lack of savings or other financial vehicles from which funds could be accessed in the event of a major illness. Studies suggest that consumers need to be prepared to face a major illness - the American Cancer Society American Cancer Society, n.pr established in 1913, this national volunteer-based health organization is committed to the elimination of cancer through prevention and treatment and to diminishing cancer suffering through advocacy, scholarship, research, estimates that one in two men and one in three women will be diagnosed with cancer over the course of their lifetime, and the American Heart Association American Heart Association (AHA), n.pr a national voluntary health agency that has the goal of increasing public and medical awareness of cardiovascular diseases and stroke, and thereby reducing the number of associated deaths and disabilities. estimates that one in four Americans will suffer a heart attack in their lifetime. "The financial burdens related to a critical illness often outlast out·last tr.v. out·last·ed, out·last·ing, out·lasts To last longer than. outlast Verb to last longer than Verb 1. the treatment and recovery period," according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Randy Stram, MetLife vice president, Critical Illness Insurance Critical illness insurance or critical illness cover is a contract, invented by Dr Marius Barnard[1], where an insurer makes a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed on the insurance policy and survives a . "The Critical Illness Financial Impact survey emphasizes the need for increasing consumer awareness about the potential gap in financial protection that some individuals may face in the event of a major illness." Making Ends Meet When asked how much money they had available in their personal savings account Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: in the event that they or their spouse were diagnosed with a major illness, 22% of survey participants said they had no money available in personal savings and another 21% have less than $1,000. The following graph illustrates how much money individuals have available in their personal savings in the event that they or their spouse/significant other were faced with a major illness: ---------------------------------------------------------------------- None 22% ---------------------------------------------------------------------- Under $1,000 21% ---------------------------------------------------------------------- From $1,000 to Just Under $5,000 16% ---------------------------------------------------------------------- From $5,000 to Just Under $10,000 10% ---------------------------------------------------------------------- From $10,000 to Just Under $20,000 5% ---------------------------------------------------------------------- From $20,000 to Just Under $30,000 2% ---------------------------------------------------------------------- $30,000 and Over 11% ---------------------------------------------------------------------- Don't Know 14% ---------------------------------------------------------------------- When the MetLife Critical Illness Financial Impact Study asked individuals where they would turn if faced with a major illness and needed to access between $10,000 and $35,000, one in four (26%) said they "do not know." Nearly half of those surveyed (46%) would either have to borrow against retirement savings or secure a credit line on their home. One in four (24%) would need to borrow from friends or family members. Monetary sources respondents would turn to in the event of a major illness are illustrated in the following graph: ---------------------------------------------------------------------- Money in a Savings Account 31% ---------------------------------------------------------------------- Cash in Other Investments (Mutual Funds, Stocks, etc.) 27% ---------------------------------------------------------------------- Don't Know Where to Get Money 26% ---------------------------------------------------------------------- Cash in Retirement Savings (401k, IRA, etc.) 25% ---------------------------------------------------------------------- Borrow From a Family Member or Friend 24% ---------------------------------------------------------------------- Equity in Your Home 21% ---------------------------------------------------------------------- Disability Coverage Not Enough The new survey found that over half (57%) of respondents do not have disability income insurance either through work or self-purchased, and among those with coverage 51% were unsure about the level of benefit they would be able to collect in the event of a covered disability. Respondents were asked how much time would elapse e·lapse intr.v. e·lapsed, e·laps·ing, e·laps·es To slip by; pass: Weeks elapsed before we could start renovating. n. before they would have to dip into dip into Verb 1. to draw upon: he dipped into his savings 2. to read passages at random from (a book or journal) Verb 1. their savings or access other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. if they were collecting disability insurance benefits equal to 60% of their gross salary. One quarter (25%) would have to tap into their savings or other assets in less than four weeks. A total of 52% would have to dip into their savings or other assets in less than six months. The following illustrates how long it would be before individuals had to use savings or other assets if they are on disability and collecting benefits at 60% of gross salary: Weeks/Months Percent ---------------------------------------------------------------------- Less than Four Weeks 25% ---------------------------------------------------------------------- One Month to Less Than Six Months 27% ---------------------------------------------------------------------- Six Months to a Year 16% ---------------------------------------------------------------------- More than a Year 20% ---------------------------------------------------------------------- "With many Americans living paycheck to paycheck, some are not aware or prepared for the financial impact should they experience a major illness. Thanks to medical breakthroughs individuals can be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about surviving these illnesses, but they must be realistic that survival can present financial challenges depending upon their life stage," adds Stram. About the MetLife "Critical Illness Financial Impact" Survey The MetLife "Critical Illness Financial Impact" survey was conducted by GfK NOP GfK NOP is a market research company based in London, formed in 2005 from the amalgamation of GfK Martin Hamblin and NOP World after the latter had been purchased by German research group GfK. NOP is a member of the British Polling Council. , a global top-five market research firm during the third quarter of 2005 among a nationally representative sample of 1,004 adults (479 men and 525 women) across the U.S. About MetLife MetLife, a subsidiary of MetLife, Inc. (NYSE NYSE See: New York Stock Exchange : MET) is a leading provider of insurance and other financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. to millions of individual and institutional customers throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Through its subsidiaries and affiliates, MetLife, Inc. offers life insurance, annuities, automobile and homeowner's insurance and retail banking services to individuals, as well as group insurance, reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. and retirement and savings products and services to corporations and other institutions. Outside the U.S., the MetLife companies have direct insurance operations in Asia Pacific, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Europe. For more information, please visit www.metlife.com. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion