Monday, December 10, 2012

Supplemental Insurance - What is it and Why Do You Need It?


The best way to understand Supplemental Insurance is to explain what it isn't. It is not Major Medical. Major Medical Insurance really belongs to the provider, does it not? Doctor, nurses, hospitals, etc., all get paid by Major Medical when someone in a family gets hurt or sick. Supplemental Insurance Plans do just the opposite. These are plans that pays cash directly to the policyholder! And what would someone need money for if a family member were to get hurt or sick? Well, lets take a look: there are those out-of-pocket medical expenses, like deductibles, co-pays, beyond usual and customary or out-of-network charges. There may be travel, lodging or extra gas and food expenses. Besides that, there are still the every day living expenses: rent/mortgage, car payment, cell phone, credit card bills and the family still need to eat. Those expenses don't go away when someone gets hurt or sick. It's hard for families, especially if the breadwinner is on a diminished or loss of income. When an unexpected event happens to someone in their family, people worry about two things, how are they going to get better and how is this going to be paid for.

Supplemental Insurance allows people to choose plans that fit the needs of their family. The money received, in the form of a check, is theirs to do with as they see fit. Unlike an FSA (Flexed Spending Account), one does not have to qualify these expenses. Plans such as Accident, Hospitalization, Cancer and Critical Illness pay dependent on the diagnosis and what type of treatment was received. Cover the whole family: self, spouse, one-parent or two-parent family plans are optional.

Supplemental Plans are available on an individual basis, however, if they are offered through an employer, there is the added benefit of tax-savings. Most plans can be offered pre-tax, saving the employee as well as the employer money. (Pre-tax premiums lower the employers taxable payroll).

Disability is also often available on a supplemental basis. People insure their home, their car, perhaps even their boat or jewelry. Ones income is their most important asset. Without income, how will someone be able to pay for any of those other assets, yet many people do not consider Disability Insurance.

We are living in critical times. Many people are living paycheck to paycheck. Additional expenses could be devastating to a families well being. With Major Medical deductibles and co-pays on the rise as well as coverage diminishing, isn't it time to look into Supplemental Insurance?

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