Of course we have all seen the commercials with a little white duck shouting, “AFLAC”, to individuals discussing their insurance coverage. The main focus is the out of pocket expenses a standard insurance policy does not cover immediately or at all (i.e. cash for a mortgage payment). Most insurance companies offer a type of supplemental insurance to cover expenses related to accidents or unexpected illness. But is it a good fit for you?
Many of the supplemental insurance policies can be tailor made depending on your risk assessment. For example, if you have a history of cancer in your family, this supplementary insurance can provide extra benefits such as money to pay for experimental treatments or lodging and expenses related to travel for appropriate care.
Supplemental policies will offer different types of coverage with specific areas of focus. For example, the most common are:
Accident - This can be for an accident not covered by your health insurance and may include accidental death and dismemberment
Cancer Insurance - This insurance is not cancer specific, but generally covers the disease and provides supplemental cash on diagnoses.
Critical Illness - Coverage for critical illnesses can vary and some of the more common, such as cancer, are often covered under a separate policy. Critical illnesses are usually diseases that require long term special care.
Hospital Indemnity Insurance - This is for long term confinement to the hospital for treatment which will provide cash after a pre-determined period of time.
Long Term Disability - Most businesses will cover short term disability for 3 to 6 months. After that point a long term disability plan would be necessary to cover expenses for a more severe accident.
Most of these insurance plans cost below $100/month that can be deducted directly from your paycheck if your company has an agreement with the insurance carrier. However, added up over a year, this insurance can be more than most families can afford. Therefore, it is important that you consider all available options and carefully select the most probable plan for you. Make certain to take the options home and discuss them with your family - supplemental insurance requires a proactive client and that begins with shopping for the best policy.
Additionally, take time to rereview your current health care policy. Some of the items advertised in the supplemental insurance may already be covered (i.e. prescriptions). You may need to work at making a more tailor-made supplemental policy that covers the missing loopholes in your standard medical plan.
If you do opt in for a supplemental insurance policy, it is important to keep in mind that your normal coverage does not communicate with your supplemental coverage. Therefore, this type of insurance requires that the insured do most of the work - filing the claims, gathering appropriate paperwork, following through, etc. However, the upside is that the claims will come directly to the insured and at a set rate. They also do not fluctuate because of other coverage. The predictability of supplementary coverage (without complex formulas for meeting preset conditions or minimums), makes this insurance easier to understand for many consumers and, in the end, worth the extra work.
Supplementary insurance can be beneficial to your family during the toughest of times. Before you dive in, make sure to shop around, review the coverage you need, and consider the risks that could impact you the most. You should always be proactive when shopping for insurance policies, but make certain you are doubly so with any supplementary plans you choose. Shop carefully, review your needs every year, make needed adjustments, and follow through with your claims when needed. As long as you are proactive, supplemental insurance can be a great addition.
If you are on Medicare, you can qualify for MediGap supplementary insurance. While there are several levels to MediGap (12 types), your coverage will be the same regardless of which insurance carrier you use. But although coverage is the same, the cost can fluctuate - therefore, shopping around is key. Finally, keep in mind that this insurance is per client and will not cover the care for family members who will need to be covered by a separate supplementary policy.