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5 Things To Know About Supplemental Insurance, Or Aflac Explained

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Supplemental insurance coverage fills in the gaps of traditional insurance. Here's what you need to know about this kind of coverage to help you decide if it's for you.

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Supplemental insurance can be a sidekick to traditional health insurance

Supplemental insurance coverage isn't comprehensive; it's designed to work alongside a typical health insurance plan and cover the gaps. 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.

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

The time you spend in the 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 go to a hospital known for specializing in your condition. These costs are often covered under a supplemental insurance policy in the form of monetary assistance. 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.

Supplemental insurance products are designed to cover more than a typical health insurance policy.

Other ways to use supplemental insurance

Another effective use of supplemental insurance is for dental and vision care, which sometimes aren't included in an employer's medical plans.

For example, the deductibles for major dental and vision procedures can sometimes be quite high. A supplemental plan can help you pay a high deductible, so it's especially worth considering when you believe an expensive procedure may be in your near future.

Where to buy supplemental insurance

Aflac, the supplemental insurance company well known for its advertisements featuring the Aflac duck, is a popular choice for consumers. However, there is a range of companies offering comparable products. For example, AARP offers a variety of supplemental insurance products. Some supplemental insurance, such as short-term disability coverage, offered by Aflac and similar companies can only be purchased through a payroll deduction from an employer.

Unlike most insurance companies, Aflac focuses on supplemental insurance. It does, however, also offer life insurance, along with stand-alone dental and vision coverage.

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

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.

Promises payment flexibility

Standard health insurance typically offers little or no choice of when and how you're reimbursed for expenses you incur. Supplemental policies frequently offer a wider range of payment options. For example, if you're recovering from a stroke, you may request that the entirety of your benefit be paid to you all at once, or you can elect to receive smaller payments as you go through recovery and therapy.

In addition, supplemental insurance is a great choice for you if you believe you're at risk for illnesses that necessitate high-cost treatments. If you have a family history of cancer, for example, it's worth considering cancer insurance coverage, since you likely have a higher risk of being diagnosed with the disease.

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 health care program.

As a rule, a more comprehensive medical plan, such as 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 coverage) plans.

Shop around for supplemental insurance

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

The premiums for supplemental insurance are dictated by your age at the time of purchase. They may also be affected by your health status. Tobacco use tends to have a substantial impact on the cost of premiums, for example, as it does with some other types of insurance. Be sure to speak with your agent to ensure your policies give you the amount of coverage you deem affordable and necessary.

Editorial note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.