Supplemental Insurance Provides Cash Benefits  You Can Use For Out-of-Pocket Costs.

Supplemental Insurance is extra insurance that you can purchase to help you pay for services and out-of-pocket expenses that major medical  insurance does not cover. Some supplemental insurance plans will pay for out-of-pocket medical expenses, such as deductibles, copayments, and coinsurance. Other supplemental plans may provide you with a cash benefit paid out over a period of time or given to you in one lump sum. The cash can be used to cover lost wages, transportation related to your health condition, or used to pay for food, medication, and other unexpected expenses you have due to an illness or injury.

Critical Illness Insurance

Critical illness insurance (also known as disease-specific insurance) is meant to ease the financial burden of a serious illness, such as cancer. These policies may provide a lump-sum cash benefit to help you pay for additional costs that are related to your illness but not covered by your regular health plan or disability coverage. Depending on the specific policy, the coverage can be used to pay for:

  • deductibles
  • out-of-network specialists
  • travel and lodging when treatment is far from home
  • experimental treatment, usually related to cancer therapy
  • child care and household help
  • normal living expenses, such as your car payment, utility bills, and groceries

Accident Policies

There are two kinds of accident policies, including Accidental Death and Dismemberment Insurance (AD&D) and Accident Health Insurance. They are often combined and sold together. The benefits vary from state to state due to local insurance regulations.
An accidental death and dismemberment policy will pay you a lump-sum cash benefit if you are the named beneficiary of someone who died in an accident. These policies may also pay smaller amounts if the person did not die in an accident but lost a limb, eyesight, or suffered permanent paralysis. AD&D insurance does not pay for any deaths related to illness, suicide, or natural causes.

Accident health insurance (also known as an accident hospital indemnity policy) may pay for medical costs resulting from an accident that are not covered by your regular health insurance. Some of these policies may also pay for medical expenses, fractures dislocations, medical imaging, physical therapy, hospital stays,and travel and lodging expenses for family members.

Hospital Indemnity Insurance

Hospital Indemnity Insurance (also known as Hospital Confinement Insurance) provides a cash benefit if you are “confined” to a hospital due to an illness or serious injury. The cash benefit – doled out in one lump sum or as daily or weekly payments – may not start until after a minimum waiting period. Similar to other types of supplemental insurance, the additional coverage is meant to help you pay for services and needed items not covered by your regular health plan.

  • How likely is it that I or a member of my family will be in a serious accident or develop a major illness?
  • Does the extra cost of the supplemental insurance policy make sense over time?

Additionally, before purchasing a supplemental policy, it is important to understand the limitations and benefits of such insurance. For example, your supplemental policy may not cover all the expenses you expected; it may impose waiting periods before payments start; or, contain limit on how much you paid and for how long.

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