Insurance customers often mistaken about how much of earnings should be set aside for healthcare

Posted on: Wednesday, May 15, 2013

As agents go about collecting insurance leads, it's important for them to adequately prepare their insurance customers for how much they can expect to pay for coverage. Because as a recent survey indicates, they frequently don't fully appreciate how much it can be.

According to a new study conducted by Aviva USA, in partnership with the Mayo Clinic, nine out of 10 people who responded to the poll said that they think about 20 percent of their retirement income will go toward medical expenses, such as for treatment, insurance and co-payments. But The Urban Institute says that consumers should expect to designate at least 10 percent more of their savings to healthcare, as it usually turns out to be about a third of the average American's income.

The study also revealed that respondents may need to go see the doctor more often due to negative health effects resulting from obesity. Approximately 50 percent of participants noted that their weight has increased "slightly" or a "great deal" over the past decade, while 16 percent said it decreased.

Philip Hagen, medical director at the Mayo Clinic, indicated that consumers today often underestimate their expenses related to healthcare, which can be particularly risky later in life when medical treatment is more commonplace.

"This survey revealed most Americans are unrealistic about some of the repercussions of lifestyle choices and aging - specifically, that as you get older, your health is apt to decline and your need for health care increases," said Hagen. "Getting regular preventive care and improving lifestyle habits to decrease health risks can help reduce these expenses and improve health and quality of life."

During a webcast hosted by Merrill Lynch, retirement and wealth management experts urged financial professionals to prepare their clients for the "curve balls" they're bound to experience with respect to healthcare cost planning. David Tyrie, head of personal wealth management, said that agents can help their customers by explaining to them how certain variables have an impact on their overall cost considerations, according to InsuranceNewsNet.

Posted In: Insurance News, Health Insurance

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