Supplemental Insurance
Affordable supplemental insurance. How does it work?
Some insurance carriers offer lower cost supplemental illness and accident insurance that can be used to fill the gaps in a high deductible major medical health insurance plan. These plans are often low in cost compared to a major medical health insurance plans or indemnity plan and offer very specific structured benefits that pay pre-determined benefit amounts for qualifying illnesses and/or accidents.
Probably the most common supplemental plan is a stand alone critical illness policy. A plan like this allows the consumer to take a higher deductible on their health plan to reduce the monthly premium, but still limit their maximum out-of-pocket exposure for major illnesses. The idea behind these policies is that the consumer willingly accepts the risk of covering smaller expenses, but is able to lower their monthly insurance premium and still have adequate coverage in the event of a qualifying critical illness.
The following is a VERY basic example of the principles of supplemental benefit plan. Actual coverage may vary.
Get an insurance quoteExample: John selects a high-deductible major medical health plan in order to keep his expenses down. His yearly deductible is $7,500 which lowers his monthly premium by $150/mo as opposed to taking a $2,500 deductible. However, John also pairs his high deductible plan with a $7,500 critical illness and accident policy. This means that if John were to suffer from a qualifying major illness which could be heart attack, stroke, kidney failure, cancer, and more – or suffer from a qualifying accident, he would receive a cash benefit of $7,500 which he could use to completely pay off his hospital deductible. This would reduce his deductible to $0 for the purposes of qualifying illnesses or accidents.
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