Supplemental health insurance is coverage that provides cash payments directly to you for out-of-pocket expenses and unexpected health costs not covered by your primary health plan. Unlike primary health insurance that pays providers directly, group supplemental insurance pays cash benefits directly to you to use however you need. And as health care costs rise, employees can look to their employers for options to help with unexpected medical expenses.
Four types of supplemental health insurance:
- Critical illness insurance – Pays a lump sum if you're diagnosed with a serious condition like cancer, heart attack, or stroke.
- Hospital indemnity insurance – Provides cash payments when a serious accident or illness results in a hospital stay.
- Accident insurance – Covers expenses from injuries like broken bones, concussions, or paralysis.
- Accidental death and dismemberment (AD&D) – Provides benefits for fatal and nonfatal accidents resulting in loss of life or limbs.
An unexpected accident or serious illness can derail your family's finances. Having additional financial protection with supplemental benefits through your employer can help you avoid a worse-case scenario.
Supplemental benefits are "in addition to" and not "in place of" medical health insurance, which can have costly deductibles and co-pays. When that happens, supplemental insurance can step in and help alleviate some of your financial burden.
The cash benefit you receive will be distributed in one lump sum to you to use at your discretion.
Common ways to use benefit payments:
- Mortgage or rent payments
- Groceries and household expenses
- Childcare costs
- Travel for medical treatment
- Lost income replacement
Who should consider supplemental health insurance?
- People with high-deductible health plans
- Those with dependents who rely on their income
- Workers in high-risk occupations
- Individuals with limited emergency savings
- Anyone wanting extra financial protection against unexpected medical costs
