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Understanding What Supplemental Insurance Is


Did you know that 98% out of those who carry around supplemental insurance for healthcare specifically have plans that cover inpatient hospital care?

People go out of their own way to get additional healthcare plans to suit their needs so that they can sleep better at night knowing that they’re sufficiently covered. Unfortunately, there are a lot of other people who aren’t even aware of the existence of a whole world of supplemental insurance.

If that’s you, no worries. We’ve got you covered. Keep on reading for our full breakdown of what supplemental health insurance entails, how it works, and why you should grab one for yourself and your family.

What Is Supplemental Insurance?

Let’s start with the basics.

In the simplest of terms, supplemental health insurance is a specialized type of plan that covers healthcare costs that usually aren’t covered by your average traditional health insurance.

For example, you’ll find plans that cover specific situations, like disability insurance, hospital stay insurance, as well as other plans that target specific health conditions, like cancer and other chronic diseases.

Examples of Supplemental Health Insurance

Here’s a simple list of some of the most common supplemental health insurance plans on the market.

  • Vision Insurance Plans
  • Disability insurance
  • Medicare Supplement plans
  • Cancer policies
  • Long-term care insurance
  • Accidental death and dismemberment insurance
  • Hospital indemnity insurance
  • Dental insurance
  • Critical illness insurance
  • Supplemental travel insurance

All of those are examples of pre-set supplemental health insurance plans. Keep in mind that you can actually tailor a supplemental health plan to your own needs if you feel like nothing of the ready-to-buy ones suit your situation.

Supplemental Health Insurance: How Does It Work?

Generally speaking, supplemental health insurance works by paying benefits directly to the policyholder or the healthcare provider. The amount that’s paid and the method of payment can vary greatly depending on each plan.

Therefore, let’s take a look at how some of the most common plans work.

Accidental Death and Dismemberment Health Insurance Plans

This specific type of insurance plan would usually reimburse you, so you can cover the medical costs that accumulate due to getting in an accident. If the policyholder dies, then the beneficiaries will be paid some benefits instead.

Besides, these plans tend to come with low premiums, and there are no medical exams required to qualify. These accidents can include car accidents, as well as other accidents that can happen in your home.

Moreover, in case of loss of limbs, like fingers, toes, or even your vision as a repercussion of a covered accident, you might be able to collect a specific percentage of the death benefits.

Critical Illness or Disease-Based Health Insurance

When it comes to this type of insurance, you might get a cash benefit paid to you if you need treatments for the specific diseases outlined in the policy, like multiple sclerosis or cancer.

Once you get the cash, you can use the money in whichever way you want. These plans don’t have specific stipulations that direct you to pay your benefits in specific ways, so getting your benefits won’t depend on how much your other health insurance pays for your medical costs.

Hospital Indemnity Insurance

If you get hospitalized, this plan would provide either daily, weekly, or even monthly cash benefits.

Yet, you’ll want to review the policy agreement quite carefully, since this plan usually required a specific minimum hospital stay before the benefits are paid to you. Similar to the critical illness plans, this one has a cash benefit that’s paid directly to you.

The Benefits of Supplemental Health Insurance

There are multiple reasons why people choose to go for a supplemental health insurance plan, and it’s heavily tied to the numerous benefits that these plans grant them.

However, you’ll want to be aware that random supplemental health insurance can’t be as beneficial when it comes to specific needs, like filling in the gaps left by medicare’s comprehensive plans. We’ll get to that in a minute.

Flexibility and Versatility

When you only have traditional standard health insurance plans, you’ll be locked in when it comes to your choices for reimbursement. You’ll be only paid for the specific expenses you’ve incurred.

On the other hand, supplemental plans tend to have a much wider range of payment options. For instance, if you’re recovering from a stroke, you can ask for your benefits to be paid immediately as a lumpsum amount, or you can go for a smaller payment plan that stretches to cover your recovery and therapy.

Besides, you’ll find that supplemental insurance is a great option the moment you feel like you might need one. If you know that you have a family history that already predisposes you to specific diseases, then it’s definitely worth it to get specialized insurance coverage for that specific illness.

What About the Medicare Gaps?

If you’re already seeking additional insurance to supplement what’s offered through Medicare, you’ll want to ensure that you’re going for a more comprehensive medical plan, like the Medicare Advantage plan, or even Medigap.

But, might also want to add on other supplemental plans like Plans G and N. If you’re completely unaware of what those are, you’ll want to check out the difference between medicare supplement plan G and plan N here.

How to Pick the Right Supplemental Health Insurance Plan?

The most important tip we can offer is to take your time when it comes to researching plans and make sure to shop around for the best rates and policy terms available on the market.

For example, you’ll want to compare coverage terms from different companies, before you sign on the dotted line. After all, what makes a supplemental plan worth its weight in gold is the fine print of what gets covered by the policy.

Basically, if you’re going for a critical illness policy that covers cancer, but you get another illness instead, the policy is practically worthless.

Exploring the World of Supplemental Insurance

We know how overwhelming it can be to start looking at supplemental insurance for the first time. Hopefully, our guide on what supplemental insurance is all about was helpful to you.

Just remember the basic rule of thumb, which is to research as much as you can before making a decision.

You’ll be surprised at some of the great plans available to you, but you have to go out of your way to find them.


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