Health Insurance

5 Things To Know About Supplemental Insurance, Or Aflac Explained

Aflac! The word alone probably has you thinking of the memorable and lovable duck from Aflac’s TV commercials. You may have even mimicked the duck’s trademark “Aflac” quack. While it’s an easily-recognized company, what exactly does Aflac sell? And do you need it?

Aflac’s ads don’t really say so explicitly, but Aflac is the leader with a category known as supplemental insurance. Here’s what you need to know about this coverage, to help decide if it’s something you should consider.

It’s A Sidekick To Your Health Insurance

This coverage isn’t comprehensive; it’s designed to work alongside and cover the gaps left behind by a typical health-insurance policy. This is accomplished by paying benefits directly to you, giving you a buffer to overcome the potential financial burdens of an unexpected hospital stay, illness, or accident.hea

When you make a claim against your typical insurance policy, benefits are paid out directly to the source that is owed - the hospital or doctor, for instance. While the bulk of the substantial medical bill may be paid by your insurance, you might still be left with deductibles, co-pays, and other expenses that supplemental insurance might cover.

The time you spend in hospital, or simply ill at home, may also result in lost wages. You might have travel costs from plane tickets or hotel lodging if you have to travel far to be seen by a specialist or to undergo surgery in a hospital known for its specialization in your condition.

There are also supplemental insurance products designed to cover more than a typical insurance policy. For example, cancer insurance and critical-illness supplemental insurance pay out a cash benefit in the event you’re diagnosed with cancer or suffer a heart attack or stroke.

Another effective use of supplemental insurance is for dental and vision coverage, which sometimes isn’t included in employer’s medical plans. The deductibles for major dental and vision operations can sometimes be quite high. A supplemental plan can help you pay for a high-deductible operation, especially when you believe one may be in your near future.

Aflac Leads The Field, But It Isn’t The Only Provider

Though Aflac is the most recognized supplemental insurance company, many others offer comparable products. AARP offers a range of supplemental insurance products, for example.

Unlike most insurance companies, though, Aflac focuses on supplemental insurance. It does, however, also offer life insurance, along with stand-alone dental and vision coverage. It offers short-term disability insurance--to cover you against wage loss if you are temporarily unable to work; this coverage, from Aflac and other companies, is available only through payroll deduction from an employer.

Cigna offers supplemental insurance policies with a similar range as Aflac’s. And some companies that are leaders in auto and home insurance are also active in supplemental coverage. Allstate sells accident and disability, critical illness, and long-term care supplemental insurance, while State Farm offers supplemental medical insurance that covers the added cost of hospital stays.

It Promises Payment Flexibility

Standard health insurance typically offers little or no choice in when and how you’re reimbursed for expenses you incur. Supplemental policies frequently offer a wider range of payment options.

Depending on the policy you have in place, the specific situation you’re dealing with, and your preference, you can elect to receive your benefit as a lump sum or have it disbursed over time. For example, if you’re recovering from a stroke, you may request that the entirety of your benefit is paid to you all at once, or elect for smaller payments as you go through recovery and therapy.

Supplemental insurance is a great choice for you if you believe you’re at risk for needing it. If you have a family history of cancer, for example, it’s worth considering a cancer insurance coverage, since you likely have a higher risk of being diagnosed with cancer.

It Isn’t Ideal for Filling Medicare’s Gaps

Many older Americans seek additional insurance to supplement what’s available through Medicare, the universal federal healthcare program. As a rule, a more comprehensive medical plan, like Medigap or a Medicare Advantage plan, is a far better option than supplemental insurance for covering the gaps left behind by Medicare A (hospital coverage) and B (medical) plans.

Shop With Care, As With Any Insurance Coverage

As with all other types of insurance, you should of course always shop around and compare coverage from different companies before your make a decision.

When purchasing supplemental insurance, it’s important for you to understand exactly what will be covered by the policy. A critical-illness policy, for example, may only cover one or two specific illnesses. Be sure to speak with your agent to ensure your policies give you as much coverage as you deem affordable and necessary.

The premiums for supplemental insurance are dictated by your age at the time of purchase. They may also be affected by your health status if it’s an underwritten policy. Tobacco use tends to have a substantial impact on the cost of premiums, for example, as it does with some other types of insurance.

Dan Mattia

Dan is a contributor to ValuePenguin.