Medical care is expensive, and the cost of injuries and illnesses can far exceed the basic medical costs covered by insurance. In order to bridge the gap between what major medical insurance covers and what an insured actually needs to pay, many people choose to purchase additional supplemental health insurance policies.

Perhaps the best-known supplemental insurance provider is Aflac, a company that has become part of the public consciousness thanks to a successful advertising campaign. There are numerous other companies that offer similar benefits, however, and some employers are offering supplemental policies as an optional addition to regular group health coverage.

How is Supplemental Insurance Different from Health Insurance?

There are numerous types of supplemental health insurance coverage. Customers can pick and choose among various types of coverage to create a customized policy that will suit their needs. Supplemental insurance is unique in that the benefits are not coordinated with the major medical insurance. This means that the payout from these policies will be in addition to whatever the medical insurance pays, not subtracted from it.

Another thing that makes supplemental health insurance different from major medical insurance is that the benefits are paid directly to the insured rather than being paid to the medical provider. This means that the insured can spend the money as he or she sees fit, and some funds are designed specifically to assist the insured with paying for living expenses or other costs not directly associated with healthcare.

What does Supplemental Health Insurance Coverage do?

Supplemental health insurance covers numerous things depending on the coverage an insured purchases. Some supplemental coverage is designed to pay for very specific types of conditions, such as cancer insurance. This coverage pays for cancer treatments, transportation to chemotherapy centers, lost wages and other costs, but only if the patient has cancer. Otherwise, the coverage would not apply.

Another popular type of supplemental health insurance is accident coverage. Like cancer insurance, this coverage provides payout for an insured’s medical expenses if the insured is involved in an accident. Similarly, critical illness coverage pays for medical expenses related to critical illnesses, such as hospital stays and long-term treatment costs.

Other types of supplemental insurance pay for specific types of expenses. For example, insurance may be used to pay for lost wages or living expenses while temporarily disabled by disease or injury. This disability insurance is used to cover household expenses and can be used however the insured sees fit.

The more coverage a person buys, the better protected they will be. In most cases, a person will probably never have the opportunity to use all of the supplemental health insurance that they buy. For example, a person is unlikely to need both cancer insurance and accident insurance; although it’s not impossible that a person will experience a catastrophic accident and then later be diagnosed with cancer, the odds are fairly unlikely. Because of the diversity of risk, most insurance companies will attempt to sell multiple types of coverage to the insured.

How much does Supplemental Health Insurance cost?

Of course, the more coverage a person has, the more their supplemental health insurance policy will cost. Supplemental health policies can be expensive, and they are often pricier than regular group health insurance. When they are offered through an employer, the cost may be reduced, but they still represent a fairly substantial expense for most people.

The specific cost of supplemental health insurance will depend on a particular individual’s risk factors and amount of coverage they purchase. For this reason, it’s important to get a quote before deciding on a policy. This will help you decide if you wish to purchase the coverage and let you know how much you need to budget to set aside for these expenses.

Some people decide that the cost of supplemental health insurance is too high and the odds of requiring it too low too make it worth the expense. For these people, the money spent on supplemental insurance may be better spent elsewhere; they may decide to put it in a health savings account or simply spend it on other expenses.

Other people value the peace of mind that comes from knowing that catastrophic medical expenses will be covered. For these people, the knowledge that they will be protected against unexpected medical costs is well worth the cost of supplemental insurance coverage. Ultimately, it’s up to you to decide what to buy and how much you are willing to pay for. By researching supplemental health insurance plans and determining what coverage you may need, you can make an informed decision to protect yourself and your family.