What to know about supplemental insurance
Health insurance policies have some of the highest deductibles of any insurance and they also tend to have more exclusions. Because of this, health insurance often comes up short and leaves you with big bills. A supplemental policy can help fill in the gaps.
What is it?
Supplemental insurance is so called because it acts as a supplement to your regular health insurance. It can be used to pay things such as deductibles, copays and coinsurance. Depending on the policy, it might also automatically pay you money if you are injured or diagnosed with a certain serious illness.
Who is it for?
A supplemental policy can be a good investment for anyone, but it is a particularly good idea for people with health insurance that has high out-of-pocket costs and anyone with a job where an accident is a big risk, such as construction workers. It can also be a good choice for people who are the sole earners in their households.
How does it work?
How a supplemental policy works depends in big part on what kind of policy it is. It may pay for some of your out-of-pocket costs or it may simply pay you a lump sum that you can use for any expenses, not just medical ones.
Types of policies
There are several different types of supplemental policies. Accident insurance pays you a lump sum payment if you are hurt in an accident and can’t work. Critical illness insurance pays if you are diagnosed with a serious illness covered in the policy, such as heart disease or cancer. Cancer insurance specifically pays you if you get cancer. There also are supplemental policies that specifically work in tandem with Medicare.
The main benefit of having supplemental insurance is the ability to receive payments that can help you cover your medical bills or pay for living expenses if you are out of work due to a major illness or injury. Such supplemental payments could keep you from racking up huge debt and facing bankruptcy.