Supplemental Insurance Plans

What supplemental insurance is for

Health insurance pays the doctor. It leaves you the deductible, and it won't pay your rent while you're out of work. Supplemental insurance pays cash straight to you when something covered happens, like an accident or a hospital stay. My post on what it covers goes further.

Types of supplemental insurance

Accident insurance

Pays a lump sum if you're hurt in an accident, no matter what your health plan covers. The cash is yours to spend, on medical bills or on rent.

• Emergency room visits and ambulance rides
• Fractures and burns
• Follow-up care and physical therapy
• Accidental death and dismemberment

Critical illness insurance

Pays a one-time amount if you're diagnosed with a covered illness. That buys you room to focus on getting better.

• Cancer (including early-stage)
• Heart attack and stroke
• Organ transplant
• Kidney failure and other major conditions

Hospital indemnity insurance

Pays a set amount per day, or per stay, when you're admitted to the hospital. It helps with the deductible and the bills that pile up.

• Hospital admission benefit
• Daily hospital confinement benefit
• ICU and critical care coverage
• Outpatient surgery benefits

Who it helps

• People on a high-deductible plan. Cash from a claim can cover the deductible.
• Families with kids in sports. That is where accident coverage gets used.
• Self-employed people. With no paid sick leave, a cash benefit can replace some of the income you lose.
• Anyone who couldn't cover a big deductible from savings. It works next to any health plan.

How it works

1. You pay a monthly premium. It typically runs $20 to $60 a month, depending on the coverage.
2. Something covered happens, such as an accident or a hospital stay.
3. You file a claim.
4. The cash goes to you, not to the hospital.

Worth knowing

• The money is yours. Spend it on medical bills or on the mortgage.
• No network. Benefits don't depend on which doctor or hospital you use, and the policy sits next to your health plan instead of replacing it.

Do you need it?

Maybe not. I'll look at the health plan you have and tell you where a supplemental policy would help, if anywhere.