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Understand the financial benefits of voluntary insurance

Understand the financial benefits of voluntary insurance

Are you rolling the dice on your health? Do you think a serious accident, injury or illness won’t happen to you? Or maybe, like many others, you just haven’t thought about it. Anyone can experience a significant medical event in an instant: an automobile accident, a major sports injury, or a diagnosis of a chronic illness, just to name a few. It could happen, but many people aren’t prepared for the financial ramifications of living without a paycheck, or underestimate the high out-of-pocket costs that accompany such an event.

But you can’t spend life worrying about what might happen. A little preparation can be a huge weight off your shoulders. There’s an easy way to help protect your finances – and have peace of mind – in the event of a serious medical event or illness: voluntary insurance benefits.

Voluntary benefits pick up where major medical insurance leaves off. Cash benefits are paid directly to you and you can spend it how you choose: for prescriptions, medical bills not covered by your primary insurance policy, even to pay rent or buy groceries – the choice is yours.

Before you apply for a policy, like any purchase, don’t jump right in. Consider these dos and don’ts about voluntary insurance.


Do

Do protect your financial stability

Forty-two percent of Americans say they are not at all or not very prepared to pay out-of-pocket expenses, according to the 2014 Aflac WorkForces Report. The study also found 49 percent have $1,000 or less to pay out-of-pocket expenses associated with a serious illness or debilitating accident and 27 percent have less than $500.

If this scenario sounds familiar, the best way to help protect financial security is to have a safety net. Voluntary insurance can help curb the high medical costs associated with the unexpected. 

Do your homework

Voluntary policies such as accident, hospital, critical illness and disability are a good option for anyone who wants to help protect their nest egg, but when it comes to applying for insurance, one size does not fit all. The key is to get the right policy for your individual needs. Researching different plans, coverage and costs will help to determine which policy is best for your personal situation.

Do educate yourself on how voluntary insurance works

Unlike major medical plans, voluntary insurance pays you cash that can be used for medical expenses or your daily living expenses. It’s a supplement to your major medical plan and can help ensure you have money coming in when you can’t earn an income from work. This helps provide financial security until you get back on your feet and return to work.

Do research the insurance provider

The insurance provider you select should have a long history of insurance expertise, be easy to work with, pay claims quickly and have excellent customer service. Insurance companies are ranked and rated by independent third-party agencies based on stability, service history, credibility and overall performance. These rankings are important because they provide a sense of the reliability and integrity of an insurance company.

Do consult with an expert

Talk to a qualified insurance broker who can help you through the process. Especially with the new health care landscape, navigating the changes can be difficult. A good broker will be your consultant and advisor who will answer your questions, explain confusing terminology and ultimately, work with you to choose the policy that’s best for you.


Don't

Do not have a false sense of security

Most people don’t think about having a serious accident or debilitating illness, and if they do, they think it won’t happen to them. But statistics from the U.S. Social Security Administration say otherwise. More than 1 in 4 of today's 20-year-olds will become disabled before retirement.1 If the unexpected were to happen, and you become unable to work, who’s helping with the finances?

Many U.S. workers assume that Social Security will take care of everything should they become disabled. Contrary to popular belief, qualifying for Social Security disability benefits can be difficult and it can take a long time before the benefits kick in.

Do not underestimate the cost of out-of-pocket medical expenses

The cost of out-of-pocket medical expenses associated with health care can vary widely, depending on the type of medical illness or event, the health insurance policy you have and the length of the illness, but one thing is certain: As health care laws mandate employers to provide certain insurance coverage, more and more businesses are offsetting higher insurance expenses by shifting costs to employees, in the form of higher out-of-pocket expenses and/or higher deductibles. This means you will likely be responsible for more out-of-pocket expenses.

Do not think voluntary insurance is too expensive

Voluntary insurance may be more affordable than most people think. There are many policies available to fit most budgets. For a small amount each month, the benefits help provide you and your family with the security to maintain your everyday life, without worrying about huge unpaid medical bills or loss of income for daily expenses.

Do not wait until the last minute to prepare for open enrollment

Understanding the ins and outs of voluntary insurance takes time and it is important to prepare for enrollment ahead of time. Yet, many workers don’t put in the necessary time or energy. According to the Aflac study, nearly half (46 percent) of workers spent fewer than 30 minutes preparing for and selecting benefits last year, and three-quarters (77 percent) spent less than an hour.

Do not forget your insurance policy belongs to you

Even if you retire or leave your company, your voluntary insurance policy stays with you. A voluntary insurance policy is “portable,” meaning you don’t have to worry about losing coverage if you change jobs.


Summary
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If you were to become disabled or ill for a long time, hopefully you and your family would be taken care of. However, if you're uncertain of your financial situation, now is the time to cover that risk by considering voluntary insurance. It's easy and a safe way to help provide security for you and your family.


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Matthew OwenbyVice President, Human Resources

Matthew Owenby has 15 years of experience in the financial services/HR industry and is Aflac’s vice president of Human Resources. He is responsible for the strategy and implementation of all aspects of human resource management for Aflac’s mo...

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