More and more people are reinforcing their health insurance coverage by purchasing supplemental plans. These are policies for very specific health coverage, such as dental or vision, which supplement your health insurance coverage in areas where you need additional support.
Do you think you might need one of these policies? Here we will discuss the reasons you might want to purchase a supplemental health insurance plan. Read below to find out if any apply to you and why. The more information you have, the better decisions you can make to protect you and your family’s health.
Reasons to Have Supplemental Insurance: Article Contents
What is a Supplemental Insurance Policy?
The first thing you should know when purchasing a supplemental insurance plan is what type of product it is. As you know, a law called Obamacare, or the Affordable Health Care Act, went into effect, which made it mandatory for everyone to have private health insurance. There are also programs for specific segments of the population, including Medicare and Medicaid, that provide coverage for people to whom the Affordable Health Care Act doesn’t apply.
However, most people manage their plans through insurance companies that offer very comprehensive services. Even so, there are services that are not included in their coverage, or which require a copay. To manage these unplanned expenses, it’s a good idea to purchase a supplemental health insurance plan.
There are many of these types of policies available. They cover, for example, long and short term dental, vision and hearing care, cancer treatments, heart attacks and related conditions, hospital expenses, and even final expenses in the event of death. By purchasing one of these policies, you can guarantee that you will never have to pay extra if you experience any of the complications that are covered by your plan.
Another advantage is that these polices can cover your entire family. So for example, if you have children with dental problems, dental insurance can be much more attractive than the coverage offered by your conventional plan (if it covers these treatments at all). And, of course, it will be much cheaper than paying for each dental treatment out-of-pocket.
With one of these policies, it’s easier to pay for high medical expenses not covered by your insurance or other programs, including Medicare. If you think that you, or one of your loved ones, might have a health problem that could represent significant expenses, you should consider purchasing one of these supplemental insurance plans to cover gaps in your policies so that you won’t have to pay for these excessive costs.
In fact, a 2016 report from the Kaiser Family Foundation found that 20% of Americans of working age with health insurance had difficulties paying their medical bills. Specifically, 75% of these people had difficulties paying copayments, deductibles, or similar payments.
These medical payments are the cause of over 60% of personal bankruptcies in the country, according to a study from Harvard. In addition, these studies showed that 72% of those whose finances were ruined by medical bills had insurance, meaning that extraordinary expenses not covered by their health insurance policies were to blame.
Reasons to Have a Supplemental Insurance Policy
Protecting yourself from unexpected and costly expenses is one of the main reasons to purchase a supplemental insurance plan. But there are many other reasons, including:
- Cash in Your Pocket. In some cases, supplemental insurance don’t pay hospitals or medical companies directly for the treatment or services you need when you are hospitalized for a health problem or accident. What they do in these cases is hand over the benefit amount directly to you so that you can pay the bills. In these situations, if the cost you are required to pay is less than the benefit paid by the insurance company, then you can use the remaining money for any other expenses you may have.
- Your Children Need Extra Care. Whether it's dental, vision, or any other specialty, it’s very likely that at some point your children will need treatment that is not included in normal insurance plans. Or it could even be you who suffers an illness or accident that could put you out of work temporarily. In these circumstances, you will need more help to care for your children and their health problems while you recover. Specialized insurance serves as a safety net in a situation like this. They are the perfect complement to your health insurance and give you the extra confidence of knowing that your loved ones will have everything they need.
- You Don’t Have Savings. If you have very little or no savings, just like many Americans, you won’t be able to cover an extraordinary health expense. To avoid this, it’s important that you have a supplemental insurance plan in place to keep you from having to go into debt to pay for something as simple as dental treatment.
- Your Deductibles are Too High. If your conventional health insurance has deductibles and out-of-pocket expenses, you need to calculate how much these could add up to over the year. If the amount is very high, you might not even be able to pay it. Again, the solution to this is to purchase a supplemental insurance plan.
- Coverage During Retirement. If you have retired, or are planning to, you should think about how to protect your health during retirement. You might not yet be eligible for the Medicare coverage you need, meaning that you will need to complement your insurance. The sooner you purchase the supplemental policies you think you might need, the cheaper they will be.
- Your Company Offers Supplemental Policies. Many times your employer will take care of purchasing supplemental group plans. This is an attractive option because it generally is included as part of your salary and they are very easy to use.
As such, there are many reasons to strengthen the confidence and measures to protect yourself and your loved ones. If you think you are going to need more coverage, don’t hesitate to ask your insurance agent right away. Agents can give you the best advice and have the knowledge to design a supplemental insurance plan that is right for you.
When to Purchase a Supplemental Insurance Policy
Now, when is the best time to purchase these types of plans? You don’t need all types of plans at the same time, and some you might not ever need. However, there are some good times to purchase supplemental plans, including:
- Upon Starting High-Risk Activities. If you engage in any high-risk activities, like an extreme sport, you might need a supplemental insurance plan, or even life insurance. With a supplemental plan you will have special coverage if you have an accident that requires an extended hospital stay. Or, with accidental death and dismemberment insurance, known as AD&D, you can have coverage that will even cover your family's financial needs.
- If Your Work is Dangerous. Starting a job where you are at risk for accidents can lead to a situation like the above. In this case, AD&D insurance policies are common, and now is the time to purchase one. It’s also common for them to be offered directly by employers.
- When You Get Married. Getting married is a time of change in everyone’s life. From this moment forward, you start to put your family’s needs before your own. It’s also a time when you begin to have more expenses. Marriage is costly: you move to a new home, get a new car, etc. With all these expenses, it’s a good idea to protect yourself with supplemental insurance so you can avoid having to pay expenses derived from unexpected treatments.
- When You Have Kids. When you get married, many times children follow shortly thereafter, along with their own medical needs. Even if your children are perfectly healthy, they can need glasses, or orthodontic treatments that are sometimes very expensive, especially if they include braces. Dental and vision insurance are a good idea to make sure that these expenses don’t become a burden on your family. If you have a child with significant health care needs, this is just one more reason to take the precaution of having a supplemental health care plan that will allow you to cover costs such as long-term hospitalization or treatments not covered by your insurance.
- When You Retire. Retirement is a good time to think about insurance that will make your golden years easier. For example, hospitalization insurance, or insurance that covers cancer treatments.
In reality, any time is a good time to purchase one of these supplemental health insurance plans. Don’t let time get away from you and choose the ones you need today.