Prudential Report Reveals the Impact of a Critical Illness on Financial Wellness

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Prudential Report Reveals the Impact of a Critical Illness on Financial Wellness

  Highlights Growing Financial Pressure for American Employees

NEWARK, N.J.--(BUSINESS WIRE)-- As the health care landscape continues to evolve, Americans are grappling with ensuring their families are financially protected from a medical crisis, according to a white paper released today by Prudential Financial, Inc. (NYS: PRU) . The report, Critical Illness Protection: On the Road to Financial Wellness, explores the role critical illness insurance can play in closing health care coverage gaps.

Critical illness coverage provides a lump sum payment upon diagnosis for a predetermined set of critical illnesses to help cover medical and non-medical expenses.

"There are three significant factors pressuring financial wellness and widening coverage gaps," notes Bob Patience, vice president of voluntary benefits, Prudential Group Insurance. "Many families don't have savings sufficient to cover the out-of-pocket expenses associated with a critical illness, health care costs are projected to continue to rise faster than inflation, and many employers continue to shift more healthcare costs to employees."

About half of U.S. households have savings less than $10,000. Nearly half of households reported they would not be able to come up with $2,000 in cash within 30 days, if needed. Inadequate saving, increasing health care costs, and shifting of responsibility for health care costs to employees have led to financial distress and bankruptcies for many households. Sixty-two percent of all bankruptcies are based on a medical event, and the share of bankruptcies due to medical problems rose by 50% between 2001 and 2007. Surprisingly, 78% of those individuals in bankruptcy due to medical costs had health insurance, yet their average out-of-pocket medical expenses were nearly $18,000.

"Critical illness insurance can help a family maintain its financial wellness by providing funds to pay any expenses, whether they are medically related or not," Patience added. "The majority of out-of-pocket expenses incurred during a serious illness are non-medical, including transportation for treatment, and medically necessary renovations to a home."

Critical illness insurance is not a substitute for health or disability insurance; however, it can help address the financial risks individuals face when struck by a serious illness. These may include lost wages of the patient and/or a family member acting as care giver, medical expenses such as deductibles and co-pays, and non-medical expenses such as family lodging or meals purchased during an individual's hospital stay.

In 2010, 22% of U.S. employers offered critical illness insurance plans, up from 12% in 2002. "We expect this trend to continue. Critical illness insurance offers advantages to employers and employees alike, allowing employers to increase the attractiveness of their benefits programs, and offering employees an affordable way to minimize the financial risk associated with a critical illness so that they can have financial peace of mind while they focus on recovery and physical wellness," noted Patience.

Prudential Group Insurance manufactures and distributes a full range of group life, long-term and short-term disability, and corporate and trust-owned life insurance in the U.S. to institutional clients primarily in connection with employee and membership benefits plans. The business also sells critical illness insurance, accidental death and dismemberment, and other ancillary coverages and provides plan administrative services in connection with its insurance coverages.

Prudential Financial, Inc. (NYS: PRU) , a financial services leader, has operations in the United States, Asia, Europe, and Latin America. Prudential's diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential's iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit

The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ 07102.


Sheila Bridgeforth, (973) 802-6852

KEYWORDS:   United States  North America  New Jersey


The article Prudential Report Reveals the Impact of a Critical Illness on Financial Wellness originally appeared on

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