Personal property coverage is an investment, but it could save you thousands of dollars or more in the long run.
Supplemental medical insurance
Supplemental medical insurance is designed to cover expenses above and beyond what the policyholder’s health care plan covers. Supplemental medical insurance can serve as additional health insurance or can be purchased to cover the costs of deductibles, copay fees and co-insurance.
Supplemental medical plans vary substantially. Plans may provide coverage when a certain event occurs, such as receiving a cancer diagnosis, having an accident or being hospitalized.
Other plans provide long-term care insurance, disability insurance or dental coverage. Medicare and Medicaid also offer supplemental plans.
Supplemental medical insurance also is referred to as defined benefit insurance because the policies only cover a specified dollar amount of insurance.
For example, the policy may provide $500 per day in hospital coverage. Supplemental medical policies are typically less expensive than traditional health insurance. This is because the benefits offered are considerably less than regular health insurance policies.
While supplemental medical insurance policies are relatively inexpensive and the benefits are paid in cash to the policyholder, they may leave policyholders unprotected on catastrophic claims, where the insured’s policy only covers a fraction of the costs incurred.
For those looking to purchase supplemental insurance plans, oftentimes employers offer these benefits at an additional cost. Private insurers and insurance brokers also can help you find a plan to meet your needs.
Supplemental medical insurance is often a good choice for seniors who need better coverage than traditional Medicare. This insurance can be purchased through Medicare.gov.
Supplemental medical insurance example
Stan purchases a health care plan through his employer. His policy has a $3,000 deductible. Stan purchases a supplemental policy to cover costs should be in an accident, become hospitalized or is diagnosed with cancer.
Two years later, Stan falls off a ladder and breaks his leg. As a result of Stan’s policy, the insurer paid him $500 because he visited the emergency room, $200 because X-rays were taken and $150 for each day that Stan missed work. These reimbursements help offset Stan’s deductible.
Health insurance premiums, copay fees, and deductibles can be confusing. Learn the five essential facts about health insurance.