Supplemental Insurance

What is a Supplemental Insurance Policy?

Insurance provides a safety net so the policyholder does not have to pay certain expenses out of their own pocket. Supplemental insurance is add-on insurance that goes along with insurance the policyholder already has. It decreases the policyholders out of pocket expenses even more.

Who Needs this Coverage?

Supplemental coverage is not for everyone. The plans are best when there are expenses you are very likely to incur. A person with an illness could use supplemental coverage to reduce their medical expenses. Plans may cover medical-related, out of pocket expenses, such as co-payments or deductibles. Some supplemental plans even offer cash benefits for lost wages or essential expenses, like transportation or food.

How do Supplemental Plans Work?

Supplemental coverage works much like traditional insurance. The policyholder pays a premium, and the insurance company provides certain benefits. As long as the policyholder pays as agreed, the insurance company will uphold their part of the agreement.

The insurance company usually issues benefits over week or months. In some cases, the insurance company might pay the benefit in a lump sum.

Types of Coverage Available

  • Medical and life insurance plans are the most common when it comes to supplemental insurance. Here are some of the most popular:
    • Critical or Catastrophic Illness – This type of supplemental policy goes along with standard health insurance. It covers costs associated with a long-term illness.
    • Accidental Death – This may cover only accidental death or be a part of an Accidental Death and Dismemberment plan. They are a supplemental form of life insurance.
  • Hospitalization Indemnity – These plans focus on the expenses associated with in-patient and long-term hospital care.
  • “Medigap” – This coverage is for people with Medicare. It picks up many of the out-of-pocket expenses not covered by Medicare Parts A & B.

Is Supplemental Coverage Reasonable?

Premiums for supplemental insurance are usually inexpensive. Having an extra helping had is not a bad idea.