When it comes to insurance, some argue that only economically active people or people with dependents should need insurance. So it is not uncommon to hear "My son/daughter/wife/husband is not working, so we don't need insurance for him/her." Common but foolish, especially when it comes to critical illnesses or disability. Here's why.
One often overlooked aspect is the impact on a family member caregiver should the unfortunate happen to a loved one. These individuals who make the sacrifice for the family and take up the demands of taking care of a loved one often end up with their career impacted.
And the impact could be huge with many of these caregivers ultimately having to stop working.
While recent research conducted by LIMRA is based in the US and not specifically related to critical illnesses or disability, there are many parallels that we can still draw from:
According to the LIMRA research, there are 43 million Americans currently acting as an unpaid caregiver for a family member.
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Advances in medicine and better lifestyle choices have helped more Americans live longer but many of these older Americans often need caregiving help – and oftentimes it falls on the family to provide it.
Lost opportunity
LIMRA wanted to learn how caregiving for a family member impacted their family’s finances. Aside from the out-of-pocket costs associated with caring for a loved one, there is often a cost in terms of lost opportunity for those who work outside the home.
New findings from LIMRA suggest half of unpaid caregivers work full-time outside the home. For many of these individuals, the demands of taking care of a loved one has impacted their career.
The study found 4 in 10 had to take an unpaid leave of absence or decrease the number of hours they worked because of the demands of caring for a family member.
Three in ten say they have turned down a promotion and a quarter say they have lost job benefits, such as medical, retirement, insurance, etc. because they had to cut back their hours due to their caregiving responsibilities.
In addition, a significant percentage indicated they ultimately had to stop working.
• 22% voluntarily quit
• 18% had their employment terminated
• 13% retired early
LIMRA research shows 26% of private-sector employers offer paid family leave and another 38% plan to introduce the benefit within the next 18 months.
Paid-family leave was the number one benefit employers said they were planning to add. However, most private sector paid leave programs are designed for parental/maternity leave, not for family leave, which would not help the growing number of multi-generational family caregivers in the workforce.
With more than 10,000 Americans turning 65 each day, the number of families facing the financial challenges associated with providing care to an older family member is certain to grow in the next several years.
Ending thought
So the next time someone says “no” to insurance because the life assured is not economically active, it is timely to remind them that the caregiver may be and the sacrifices that need to be made.
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