Coping with the loss of a loved one may be one of the hardest challenges we face – so hard, in fact, that many families avoid talking about a potential loss. Unfortunately, that avoidance may very well create additional pain and challenges in the future.
Cigna's 2019 Group Life Study1, a national sample of 500 adults, ages 25-65, found that people who had lost a loved one were negatively affected across five dimensions that affects personal health and well-being: social, emotional, physical, financial and environmental. While emotional and physical impacts were to be expected, the survey showed that grieving families also often struggled with financial strain, unanticipated debt and an upheaval in family dynamics.
To help protect your family should the unfortunate happen requires action long before the loss itself. You need a proactive and frank assessment of how best to protect all aspects of your family's health and well-being –as well as their need for greater financial security.
The first step in providing that sense of security is to have that difficult discussion around a potential loss. Here are five tips to guide the conversation based on study insights1:
- Create an Estate Plan to help avoid financial strain and uncertainty. Among households that suffered a loss, more than two-thirds (67 percent) of individuals without life insurance coverage said they and their family were left with substantial medical bills and "a lot of debt" to pay. One-quarter of those uncovered reported it took two years to recover from the financial hardship.
- Anticipate changing family dynamics. Among children who experienced the death of a parent, 16 percent experienced a change in caregiving responsibility for another parent and 14 percent moved to a different residence and/or changed their living situation for financial reasons.
- Discuss final expenses. More than half (56 percent) of individuals without coverage said funeral expenses following the loss of a loved one financially strained the family – more than twice the level of those in households with life insurance coverage. Further, children in households without coverage were significantly more likely to feel that the surviving parent was financially unprepared to cover the costs.
- Understand the value of life insurance benefits. Individuals do see the value in benefits in terms of financial protection and greater peace of mind. Those in households with some life insurance coverage were twice as likely to report their current financial condition as very good.
- Share the knowledge. Individuals whose parents had life insurance coverage felt more prepared prior to a parent's passing and felt more prepared for the future of a surviving parent. Eighty percent of individuals with life insurance benefits were more likely to believe they needed life insurance to prepare for their family's future. In households where parents prepared their children with life insurance benefits and engaged in related preparedness conversations, children and family members were significantly more likely to be currently covered by life insurance.
Conversations that include all five dimensions mentioned above will likely lead you to the understanding that life insurance can be a cost-effective way to help provide your family with additional financial resources when they most need it. In fact, most people actually overestimate the cost of life insurance coverage by more than three times its actual cost; millennials overestimate the cost by five times2.
"We understand that a loved one's passing is incredibly difficult, so we make solutions available that can holistically support families during such times," said Rich Kappers, Senior Product Consultant, Cigna Group Insurance.
"Our goal is to educate consumers on the importance of being prepared, while also working closely with employers to help individuals understand where to seek help and support."
September is Life Insurance Awareness Month, which makes it a good time to evaluate your current benefits with your family members. To make it even easier to evaluate your benefits, Cigna offers both a life insurance assessment and calculator to determine how much life insurance you will need, as well as a personal information organizer that keeps key personal and financial information in one convenient place.
For more information, visit Cigna Group Life Insurance.
1 Cigna "2018 Life Study." November 2018
2 American Payroll Association, "Getting Paid in America Survey." 2017.;