September 2019

The unexpected impacts of losing a loved one

What would your family do if something were to happen to you? Would they be able to make ends meet? For how long? It's hard to think about. However, that’s the goal of Life Insurance Awareness Month: to remind everyone of the important role life insurance plays in helping individuals and their families stay financially protected and better prepared.

The reality is that 1 in 5 people who don’t own life insurance don’t know how much coverage to buy.  and most consumers overestimate the cost of life insurance coverage by more than 3x its actual cost1.  At Cigna, we believe that life insurance coverage is one of the most important and cost-effective benefits your clients can offer to their employees.

With a commitment to whole-person health – supporting physical, emotional and financial wellness – Cigna recently commissioned the Cigna Group Life Study2 of 500 U.S. adults. The purpose of the study was to further understand how people coped with parental losses and how Life Insurance benefits did help or could have helped them through those difficult times. 

The study reveals the unexpected impacts that an individual may feel when a loved one passes away.  Emotional stress when a loved one passes away, especially a parent, can be debilitating. But other related and unexpected stressors can also impact multiple dimensions of well-being - from financial to social to physical to environmental. For example, for children who experienced the death of a parent, both covered and non-covered individuals:

  • Took on more financial responsibility in the household (32%).
  • Took on more caregiving responsibility for a sibling or parent (16% and 18%, respectively).
  • Experienced a change in caregiving responsibility for another parent (16%).
  • Moved to a different residence/changed his or her living situation for financial reasons (14%).

Individuals without coverage, however, were in a relatively worse position compared to those with coverage. In fact, the loss of a loved one took a more significant toll on their financial and mental health

  • 61% say they and/or their parent worried about finances after the death.
  • Slightly more than two-thirds (67%) of individuals in households without life insurance coverage say they and their family were left with substantial medical bills and “a lot of debt” to pay (compared to 59% with coverage).
  • More than half (56%) felt funeral expenses financially strained the family.
  • One-quarter of uncovered individuals reported it took more than two years to recover from the financial hardship.

“Preparedness is key.  We know employees are in different places in their lives and have different needs, so we’re focused on providing flexible and affordable plan options to meet people where they are,” said Rich Kappers, Senior Product Consultant at Cigna Group Insurance.   “Our holistic, customer-centered approach supports whole person health for those dealing with challenging scenarios – including when a loved one passes away.”

An important finding for employees and their families is this:  individuals see incremental value with life insurance benefits because they do more than just create financial protection – they create peace-of-mind. Individuals whose parents had life insurance coverage felt more prepared prior to a parent’s passing and also felt more prepared for the future of a surviving parent. In fact:

  • Those in households with coverage were twice as likely to report their current financial condition as "very good."
  • For those in a household with coverage, a relatively fewer amount of those surveyed felt the strain of burial expenses as opposed to those who were not covered.
  • In households where parents protected their children by having life insurance benefits and engaging their family in related preparedness conversations, children and family members were significantly more likely to be currently covered by life insurance.

“We are assisting employers by offering their employees robust benefits, including access to financial planning tools and a suite of programs and services to guide individuals (and their families) through these potentially unexpected – and challenging – life events,” says Lynn Goldbach, Vice President of Cigna Group Claim Operations.  “We even make connections between employees’ health risks and suitable wellness programs by leveraging medical underwriting information for a more holistic, health view.  We know life is connected and we believe holistic coverage, including life insurance, can help highlight health engagement opportunities and cover all aspects of a person’s well-being.”

Whether employees are healthy, sick, injured, facing a life changing event or financial challenge – Cigna is here to provide assistance and support.  For more information about Cigna's life offerings or to learn more about our research, please contact your Cigna sales representative or visit https://www.cigna.com/employers-brokers/plans-services/group-life-insurance

  1. LIMRA, "2018 Insurance Barometer Study." 2018
  2. Cigna, “2018 Life Study.” November 2018.