Supplemental Health Insurance

What is Supplemental Insurance?

Supplemental insurance is a form of “extra” health insurance that covers the gaps or holes in basic health insurance policies created by deductibles and co-pays. Depending upon what kind of supplemental insurance is purchased, additional expenses such as lost income and additional living expenses incurred during a long illness or injury.

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There are a number of different types of supplemental insurance including disease-specific insurance, accident health/ accidental death and dismemberment coverage, and hospital indemnity insurance. To get the answers to your questions about supplemental coverage, click on one of the links below:

Characteristics of Supplemental Insurance

The three most common types of supplemental insurance coverage include:

  • Disease Specific Supplemental Insurance, which offers cash benefits for beneficiaries who need to be treated for a specific disease. Pay-outs come directly to the beneficiary per day of treatment or per procedure. Most policies have a minimum daily or procedural benefit and a policy maximum. There is no prerequisite for how the money is spent or how much your insurance policy pays for your treatment.
  • Accident Health Insurance or Accidental Death and Dismemberment Supplemental Insurance, which reimburses the beneficiary for the medical expenses that result due to an accident. Loss of limb or vision can result in a partial death benefit, otherwise, those you choose to be the beneficiaries of the policy will receive any payouts in the event of your death or specific disabilities.
  • Hospital Indemnity Insurance, which provides a cash benefit if you are admitted to the hospital for an extended period of time. There is usually a minimum number of days required before the payments begin and they continue on a daily, weekly or monthly basis.

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Benefits of Supplemental Insurance

Most supplemental insurance policies do not require a medical exam for approval. Also, their premiums are usually very low, which makes them affordable.

Drawbacks of Supplemental Insurance

A good health insurance policy will cover the basic health care that most individuals will need in a given year. Supplemental insurance is not meant to take the place of a solid policy but to pick up where it leaves off and cover you in the event of an unforeseen event.

Who Would Benefit From Supplemental Insurance?

It depends upon the individual situation. Retired and elderly persons, those who are self employed and large families who are ill equipped financially to handle a sudden onslaught of medical bills will benefit from having specific disease or hospital indemnity supplemental insurance policies in place. Also, those whose financial situations would suffer if they were suddenly unable to work would benefit from an accidental death or dismemberment policy.