Types of Supplemental Insurance

Everything You Need to Know About Supplemental Insurance Before You Buy

Types of Supplemental Insurance
December 27, 2013

You may think you have all the insurance you could possibly need to cover your healthcare expenses, but are you certain about that? Do your policies cover every catastrophic life event that could befall you? Check your current insurance policies — you will be surprised to discover what is not covered! If that’s the case, you may be a prime candidate for supplemental insurance.


What is supplemental insurance?

Designed to work in tandem with other forms of health insurance coverage — such as accident, sickness and injury — supplemental insurance helps fill in the gaps in your primary insurance. Generally speaking, young couples with children, those who are self-employed, low-income households or people on Medicare are strong candidates for supplemental insurance.

Just about any medical condition or situation imaginable can be covered by supplemental insurance. Some plans will cover your costs for preventive medical care, while others will pay for treatments due to cancer or life-threatening illness. Others will pay you a lump sum benefit to cover any out-of-pocket expenses after experiencing a heart attack or stroke.


Is supplemental coverage worth it?

Depending on the additional coverage you wish to buy, supplemental insurance can be relatively affordable to very expensive. As with all forms of insurance, it is imperative that you research the policy thoroughly before shelling out your hard-earned money.



Determine exactly what you stand to gain by carrying this new premium, or if there’s a chance you may never need the additional coverage. You may discover that it makes better financial sense to pay cash for any unforeseen medical bills down the road than to carry an expensive policy for years to come. Remember that your credit score may also impact your insurance premium. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips.


The most popular forms of supplemental insurance

As noted, there is a supplemental plan for just about any unforeseen life event, but below are the most common forms of additional insurance:

  • Dental — Most health insurance policies offer poor dental coverage, so supplementing your policy could be a good idea. Supplemental dental insurance can cover expenses as mundane as regular teeth cleaning to the price of oral surgery. These plans are generally inexpensive.

  • Vision — As with dental coverage, eye coverage is generally poor in most health insurance policies. Supplemental insurance can cover everything from your annual eye exam to the price of glasses and contact lenses. These plans are also generally inexpensive.

  • Critical illness — Covers treatment of life-threatening illnesses, such as cancer or heart disease. It can also pay for time you spend in the hospital for treatment. These supplemental policies are much more expensive than typical dental or vision supplements, and prices depend on how much coverage you’re willing to buy.

  • Accident — Similar to critical illness insurance, this form of insurance covers expenses incurred from injuries due to accidents. Prices vary based on the amount of supplemental coverage you want to purchase.

It’s not always easy determining if you need supplemental insurance. A good rule of thumb is to determine what your current deductible and/or out-of-pocket expenses will be in case of a catastrophic illness or injury. Considering most major-event hospital stays cost a minimum of $10,000 (or a good deal more!), identify what your maximum annual out-of-pocket cost is on your health insurance policy. Then ascertain whether the amount is more or less than the price of buying supplemental insurance.

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