Question: Should I Buy Supplemental Health Insurance?
Answer:
That depends on several factors:
- Are you at high risk for serious illness, accidents, or hospitalization?
- Do you need the peace of mind that having additional insurance coverage can bring you?
- Can you afford supplemental coverage?
If you answered yes to these questions, you may want to look into supplemental health insurance, which offers cash benefits to defray medical costs and other expenses incurred due to sickness or injury.
There are three main types of supplemental health policies:
- Disease- or condition-specific policies - These policies offer you a cash benefit if you are diagnosed with a particular disease, such as cancer. Often, payment is made on a per day basis, but sometimes disease-specific policies offer benefits per medical procedure.
- Accident policies - These policies pay you (or your family, in the event of your death) a cash benefit if an accident occurs. Only accidents which are specified in the policy declaration are eligible for payment. The amount of the payment may depend on the degree of injury. For example, in death & dismemberment policies, the insured may receive a percentage of the full death benefit if he or she receives a serious injury, such as loss of limb.
- Hospital indemnity policies - These policies offer a cash benefit to the insured if he or she becomes hospitalized. Payment is made directly to the insured (or his or her beneficiary) on a daily, weekly, or monthly basis.
