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Supplemental Health Insurance FAQ

Fact: Supplemental health insurance covers unexpected injury sustained in an accident or critical illness. What many don’t realize is that supplemental insurance branches from one of the oldest health insurance policies in the United States. Accident insurance became popular at the turn of the 20th century when more people were crossing the nation by train. In fact, in 1919, an accident policy from Aetna cost $1 a year, and covered accidental deaths sustained in travel, fire and elevators.

While supplemental health insurance might not be as well known today, it’s a vital part of the 21st-century healthcare landscape. Here are some frequently asked questions about what supplemental insurance is, and what benefits it provides:

What does supplemental health insurance cover?

You might buy monthly warranty protection for your smartphone or iPad to avoid having to pay the entire cost of the device should it be dropped or stolen, right? Supplemental insurance is like a warranty for your individual health insurance plan. If you are injured in an accident or if you are diagnosed with a critical illness, supplemental health insurance can pay your medical bills that your insurance doesn’t cover, or simply provide cash to pay the mortgage, car payment or child care if you cannot work due to your condition.

Who is the best candidate for supplemental health insurance?

Everyone! But supplemental insurance is ideal for individuals who have a high deductible health insurance plan, and are responsible for thousands of dollars before their health insurance carrier will begin paying medical claims. It’s also great for individuals and families who don’t want to dip into their savings account to pay for unexpected injuries or illness.

Give me an example of how supplemental health insurance would work.

Several times a week, Charlie plays soccer with his friends after school. One day, Charlie trips while running down field, and breaks his wrist in the fall. His mom takes him to the emergency room and after an exam and X-ray, his broken wrist is set. The total cost of Charlie’s medical care totals more than $4,000. His family’s health insurance plan has a $2,000 deductible, and then they have to pay 20% of the remaining $2,000. They are responsible for $2,400 of the $4,000 costs. If they had supplemental health insurance, they would receive a lump sum $2,500 benefit, and would be able to pay all of their medical bills without ever dipping into their savings.

What is a “lump sum” benefit?

A “lump sum” is a one­time cash payment. Supplemental health insurance provides lump sum benefits to the policyholder, so the money can be used to take care of medical bills or pay for everyday living expenses. The decision is the policyholder’s, and no money is ever sent to an insurance company or medical facility.

What is considered a “critical illness?”

Cancer, heart attack, kidney failure, stroke and major organ transplant are some of the critical illnesses covered by supplemental health insurance. A portion of expenses are covered for other illnesses and conditions, like severe burn. It’s important to review the Plan Details of any insurance policy before purchasing a plan. The most in depth information can be found in the certificate of insurance.

How much does supplemental health insurance cost?

An individual can purchase affordable supplemental coverage for approximately $1 a day.

Are there any injuries not covered by supplemental health insurance?

Yes, supplemental insurance has similar restrictions found in life insurance policies. Getting injured hang gliding, parachuting or bungee jumping, attempting suicide or being under the influence of a drug or alcohol substance when injured disqualifies an individual from claiming their supplemental insurance benefits. A full description of exclusions can be found in the policy’s certificate of insurance.