In order to protect a policyholder from undue out-of-pocket expense, insurance provides a safety net. Supplemental insurance can be purchased as an add-on to a normal policy in order to provide the policyholder extra protection. Its primary function is to reduce the policyholder’s out-of-pocket costs even more.
Supplemental coverage may not be appropriate for all insured. The plans work best for those who expect that certain expenses are more likely to incur given a particular situation. A person with an illness, for example, might be greatly helped by supplemental coverage so they can decrease often overwhelming medical expenses. Plans can also be engineered to cover other medical-related expenses that are mostly out-of-pocket, like co-payments and deductibles. Some supplemental plans even provide cash payouts for lost wages or necessary expenses, like transportation and meals.
Supplemental coverage is not that different from traditional insurance. The policyholder usually pays a monthly premium and the insurance provider will pay certain benefits in the event of some kind of loss. As long as the policyholder pays his or her premiums, the insurance company will keep up their end of the agreement.
The insurance company can release funds in one of two ways, either over weeks or months, or in a lump sum.
The most common plans of supplemental insurance is for medical and life. Critical or Catastrophic Illness supplemental coverage accompanies normal health insurance and provides compensation for costs incurred due to a long-term illness.
Accidental Death coverage is just what its name implies and also can be a part of an Accidental Death and Dismemberment policy.
A hospitalization Indemnity plan places emphasis on the costs associated with short or long term in-patient hospital care. “”Medigap”” coverage enhances Medicare coverage and pays for many of the out-of-pocket costs incurred that are not covered by Medicare Parts A & B.
The good news is that premiums for supplemental insurance are usually quite affordable- having this potential extra financial help could end up being a very smart move.