Supplemental Insurance - I Have Coverage, So Why Do I Need Supplemental Insurance?

By Joshua S. Smith

Many people either don't know about supplemental insurance, or they just don't fully understand it. Many are faced with large amounts of debt due to health. 60% of bankruptcies in the United States are health related. Many are forced to sell their homes, cars, personal belongings, and even use their kids college funds to have to pay for health related costs because their health coverage did not cover all costs associated with their condition. Fortunately, there are solutions to cover these additional expenses and vulnerabilities that every health insurance policy has.

What is Supplemental Insurance?

Most are familiar with major medical coverage that is used to cover co-pays, and other basic health needs. Supplemental Insurance is designed to cover expenses that health insurance does not cover. When there is a surgery, or hospital confinement, if an individual will likely pay a deductible, that can be anywhere up to $10,000, then pay 15%-20% coinsurance for the surgery. policies pay the policy holder directly, in cash for these occurrences. There are no co-pays, deductibles, coinsurance. All the policyholder is required to do is pay the monthly premium, and cash benefits are paid to them when they use their policy.

Why do I need this type of coverage?

Every single health insurance policy HAS gaps and vulnerabilities. Every insurance policy has deductibles, some of which are up to $10,000. Every insurance policy also has coinsurance, of 10%-20%, which is only active AFTER the deductible is met. Supplemental insurance is designed to cover gaps, and unexpected costs that most insurance policies do not cover. Let's say we have a family, Dave is the sole proprietor of the family, Jane is a stay at home mom with their three children. Dave is diagnosed with colon cancer, and has to miss work for treatment. It is likely that Dave will have to travel quite a bit for treatment, chemotherapy, radiation, and check-ups. It is also likely Dave will have to travel to a specialist, far from home. Transportation is one of the hidden and unexpected costs of cancer that most don't know about until it is too late. If you add up air fare, hotel stays, food, and various expenses, this can easily add up to thousands of dollars very quickly. Transportation is usually NOT covered by health insurance.

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