Supplemental Health Insurance

Many people never consider supplemental health insurance until they need it, but by that point it's often too late. While your health insurance policy will cover most of your routine or occasional unexpected injuries or illnesses, there may come a point when your standard health insurance policy won't be sufficient.

Disability Benefits

Health insurance that's meant to "supplement" your standard health plan is not necessary everyone. This kind of insurance is available for people who have health needs that greatly surpass what their health insurance plan normally covers. The major differences between supplemental and standard health insurance is that supplemental plans have:

• Specific defined benefits per procedure or medical expense
• Predictable monthly costs
• Stable price over the long term
• Coverage for copays or medical bills your health plan won't cover
• Cash benefits that are paid directly to the insured for bills
• A much lower benefit cap than a regular plan
• A much lower cost than a regular health plan

Some of these aspects of a supplemental plan are very positive, while others may not be very helpful. Deciding whether this form of insurance is right for you requires an examination of your current situation and needs.

The three basic types of supplemental insurance includes:

• Disease specific: You can purchase a policy that is focused on a particular disease, like cancer. This can reduce the cost of the policy and it's also a more affordable way to protect yourself from a disease for which you know you're predisposed.
• Accidental Death and Dismemberment: This type of policy is most commonly purchased by workers in dangerous industries. When workers have an accident, income drops because disability payments are usually only a percentage of your full income. This form of insurance can help make up the difference, or pay out a death benefit to your family if you happen to die in an accident.
• Hospital Indemnity: This type of supplemental insurance pays out a cash benefit whenever you have to stay in the hospital for any extended period. This benefit can help your family pay the bills during long periods when you can't work because of injury or illness.

If you're considering whether or not you need supplemental insurance, you may have already come up against a situation where your primary health insurance didn't cover a particular procedure, or maybe you've had so many medical procedures done in a short period that the copayments became overwhelming. A supplemental health plan should be considered under the following circumstances:

• You are at high risk for a prolonged illness.
• You have been diagnosed with a serious medical condition requiring a lot of treatments.
• You are the sole earner in the family and have a dangerous job and cannot afford to live on reduced disability payments if you ever get injured.

Supplemental health can provide you with peace of mind if you are in a high risk category and want to protect your family from the effects of a serious illness, even if you already have insurance. Many people don't realize how quickly copayments can add up and potentially drive a family into serious debt. However, if you are not in a high risk category - supplemental insurance may be an additional monthly bill that you really don't need. So take careful stock of your situation and determine what you really need and what you can afford based on the odds that you could get sick or injured.

The group of people who most often need supplemental insurance are those who have pre-existing medical conditions because some insurance companies refuse to cover them. After a waiting period (typically up to twelve months), you can start receiving benefits from the insurance policy which can help you not only afford the co-payments and deductibles for your medical treatments, but it also provides a "cash benefit" that you can use to supplement your decreased income. If you need it, then draw the benefits and make full use of the policy while you have it and before the benefits "cap" at the policy maximum, which is typically much lower than regular health insurance.

If you can afford the fairly low yearly premiums, supplemental health insurance can provide tremendous peace of mind. Even when you have regular health insurance, you may face loopholes, major deductibles and sometimes even unfair denials. However, if you're covered by a supplemental health plan, you don't have to worry about how to pay for your medical needs or how your family is going to pay the bills.

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