Supplemental Insurance

Supplemental insurance.

What is supplemental insurance and when should you buy it?

Before we go over supplemental insurance, please keep in mind that some or all of these options may not be available to you if you have cancer. However, they may be worth exploring if you have a spouse. They may be able to qualify for some of the benefits.

If you currently have one of the following policies, I encourage you to review its coverages, benefits and limitations.

Supplemental insurance is extra or additional insurance that you can purchase to help pay for services and out-of-pocket expenses that your regular insurance may not pick up.

There are some insurance plans that will pay for out-of-pocket medical expenses, such as deductibles, co-payments and co-insurance. Other supplemental insurance plans may provide you with a cash benefit paid over a period of time or give it to you in a lump sum. The cash can be used in a variety of ways.

Some examples include lost wages, particularly if you do not have FMLA or for transportation related to your health condition.

Let's discuss the different types of supplemental insurance plans.

The first of these plans is Medigap or Medicare supplemental insurance.

Medigap is one of the most common types of supplemental insurance which could be sold by private insurance companies to people enrolled in Medicare, Medigap cannot be paired with Medicare Advantage plans, says traditional Medicare Part A and Part B pays for many, but not all health-related services and medical supplies.

You can purchase a medicare policy to cover some or all of the out-of-pocket costs you would otherwise have to pay.

These costs can add up to a lot, especially if you're hospitalized or need skilled nursing home services.

If you have traditional Medicare but lack Medigap coverage, there is no limit to how high your out-of-pocket costs can be.

By contrast, Medicare Advantage plans cap out-of-pocket expenses without the need for supplemental insurance.

Medigap only picks up their out-of-pocket cost for services that are otherwise covered by Medicare.

The plans do not pay for things that Medicare doesn't cover.

Some Medigap policies will also pay for certain health services outside of the United States that are not otherwise covered by Medicare.

If you're enrolled in original Medicare Part A and B and have a Medigap policy, Medicare will first pay its share. Medicare will first pay its share of your covered health care cost. Your Medigap policy will then cover the remainder.

Critical illness insurance.

This is also known as a disease-specific insurance.

You may be familiar with standalone cancer policies.

They 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.

They can help reduce the financial burden that comes with a long-term expensive illness.

Depending on the specific policy, the covers can typically be used to pay for almost any expense at your discretion.

Accidental death policies.

There are two kinds of accidental policies, including accidental life and dismemberment, or ADND and accident health insurance.

They are often sold together.

Be aware that the benefits vary from state to state due to local insurance regulations.

Accidental death policies cover expenses such as deductibles, out-of-network specialists, travel and lodging when treatment is far from home.

Experimental treatments usually related to cancer. Child care and household assistance and normal living expenses such as car payments, utility bills and groceries.

Accidental death and dismemberment or ADND policies are not disability policies. They are limited.

The injury has to be very specific.

For example, covers may include three fingers on one hand, while you're missing a toe on the other foot. Or the loss of one eye or both eyes while losing a hand.

These plans will only pay out if your injury fits the specific criteria.

They will pay you a lump sum cash benefit if you are disabled in an accident. Or they will pay the named beneficiaries in the event of your death.

These policies may also pay smaller amounts based on the severity of the injury and don't pay for death related to illness, suicide or natural causes.

Accident insurance,

also known as accident hospital indemnity policies may pay for medical costs resulting from an accident not covered by your regular health insurance.

These policies may also pay for extended home care services as well as travel and lodging expenses for some family members.

These types of policies are popular with people with high deductible policies.

Hospital indemnity insurance.

Hospital indemnity insurance is also known as hospital confinement insurance and provides a cash benefit if you are confined to a hospital due to illness similar to other types of supplemental health insurance.

The hospital indemnity coverage is meant to help you pay for services as needed items not covered by your regular health plan.

How do you decide if you need supplemental coverage?

Remember, if you are over age 65 and have Medicare, you can get the full coverage you need by purchasing a standard Medigap policy or enrolling in a medicare Advantage plan.

Nothing else is needed.

If, on the other hand, you are under the age of 65 and do not have Medicare, your first step is to determine if you and your family are fully protected with a regular health plan.

Supplemental insurance is not meant to replace regular insurance or stand alone.

It's meant to supplement your health insurance plan to fill in gaps.

Many supplemental policies aren't overly expensive, but duplicating coverage can be expensive and unnecessary.

An insurance professional can help you decide if this policy is beneficial to you or your spouse.

Before enrolling in any plan, become very familiar with the plan's coverage and limitations.

Make sure it will work with your existing coverage.

Supplemental insurance is not regulated by the Affordable Care Act.

This means that the insurer can deny coverage based on your medical history and post limits on preexisting conditions and cap benefits at fairly low levels.