Why Should We Invest In Supplemental Insurance?

Many employers offer group insurance to help their workforce financially. However, for other employees with unique needs and situations, their current employer-sponsored insurance may not be enough. 

This is when “supplemental insurance” comes in. It offers cost-effective premiums, a straightforward application process without medical exams, and the convenience of automatic payroll deductions for easy payment management.

In this article, we’ll delve into what supplemental insurance is and why it’s important.

What’s Supplemental Insurance?

Supplemental insurance goes by different names. It can be called voluntary, gap, add-on, or secondary insurance. Either way, it serves as extra coverage that supplements your primary insurance coverage or group insurance an employer offers.

For example, let’s say you have an Exclusive Provider Organization (EPO) health plan. The EPO insurance definition is similar to that of the Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) health plans. Specifically, it has exclusive networks like in an HMO and allows you to make appointments with specialists like in a PPO. 

The main downside of an EPO is that it doesn’t have out-of-network coverage. If you get into an accident during a business trip and are hospitalized in a hospital outside your EPO’s network, your EPO won’t cover it. In other words, you’ll pay the entire hospital bill yourself. This is when supplemental insurance helps a lot. In this case, supplemental accident insurance is beneficial, especially if you travel often. 

Most of the time, supplemental insurance is bought by employees who think they’re underinsured with their current employer-provided life insurance policy. It offers them a solution to bridge the financial gaps that basic insurance might not cover.

Moreover, it has a range of policies that can be bought through employers or independently, such as:

1. Accident Insurance - It covers all medical costs and related expenses from your injuries in accidents. This is especially helpful for those with high-deductible health plans or active lifestyles.
2. Critical Illness Insurance - It provides a lump sum payment if you’re diagnosed with a severe medical condition like cancer, heart attack, or stroke. This cash benefit can be used for medical bills, living expenses, or any other needs during a difficult time.
3. Hospital Indemnity Insurance -  It provides a fixed daily, weekly, or monthly benefit for each day you’re hospitalized. It helps cover expenses like room and board, transportation, and more.
4. Dental and Vision Insurance - Many standard health insurance plans have limited coverage for dental and vision care. Supplemental dental and vision insurance can help offset the costs of routine check-ups, glasses, and dental procedures.
5. Disability insurance - It provides income replacement if you’re unable to work due to an illness or injury. It ensures you can meet your financial obligations, such as mortgage payments or daily living expenses, while you focus on recovery.

Why Should We Invest in A Supplemental Life Insurance? 

Supplemental insurance is a worthwhile investment because it provides an additional layer of financial protection beyond basic coverage. This can be crucial in meeting the needs of your family, especially if you have dependents, outstanding debts, or financial obligations.

Another key benefit of it is that it allows you to customize your coverage based on your unique needs. Whether you have a large family, specific health concerns, or want to ensure your loved ones are financially secure, supplemental insurance offers flexibility.

With enhanced and tailored protection, supplemental insurance ensures you’re not left with a hefty financial burden during challenging times. It provides peace of mind, knowing that you have a financial cushion to fall back on when facing unexpected health challenges.

When Do We Need Supplemental Insurance? 

Although supplemental life insurance benefits everyone, it doesn’t necessarily mean it’s the perfect fit for every employee’s needs. To know whether you need it or not, here are some key questions to answer:

1. How much employer-provided coverage do I have? Understanding the basic coverage provided by your employer is crucial. Know the amount and whether it meets your needs.

2. Do I have dependents or significant financial obligations? If you have a family, dependents, or substantial financial responsibilities like a mortgage, consider whether the existing coverage is enough to protect them.

3. Is the employer-provided coverage portable? Check if the coverage is portable, which means you can take it with you even if you change jobs. This is essential for continuous protection.
   

4. What additional financial protection do I need? Assess your financial situation and determine if there are specific gaps or areas where additional coverage would be beneficial.
   

5. Do I have alternative sources of financial protection? Consider any existing savings, investments, or other sources of financial support you have and determine if they are sufficient or if supplemental insurance is necessary.
   

Remember, the decision to get supplemental insurance depends on your individual circumstances and needs. Asking these questions can guide you in making an informed choice about whether supplemental insurance is right for you. 

How to Choose the Right Supplemental Insurance? 

When selecting supplemental insurance, consider your lifestyle, health needs, and budget. Assess your current health insurance coverage to identify gaps that supplemental insurance can fill. 

Additionally, compare different plans, looking at coverage limits, waiting periods, and exclusions. Ensure the policy aligns with your specific needs and provides the level of protection you’re comfortable with. 

Always do your due diligence before buying supplement insurance. If unsure, it’s always recommended to consult with an insurance advisor or any other professional who can help you make better-informed decisions based on your unique situation.

Final Thoughts

Investing in supplemental insurance is a proactive step towards securing your financial future and protecting your loved ones. It offers tailored coverage, flexibility, and peace of mind, making it a valuable addition to your overall financial plan.