Definition of Supplemental Insurance

Supplemental insurance can lower the blow.

Supplemental insurance benefits are optional insurance policies that can be purchased by the policyholder in addition to a primary insurance plan. Also, supplemental insurance policies can cover costs, including medical costs and lost wages that are not covered under the policyholder’s primary insurance policy. Supplemental insurance policies can be purchased through an employer or outside of any medical benefits associated with an employer.

Purpose

Supplemental insurance benefits are optional benefits in addition to the basic insurance benefits. Therefore, an individual has an option to purchase supplemental insurance. An individual may enroll in a supplemental insurance plan while currently holding a primary insurance policy through a commercial carrier. Supplemental plans can pay for any expenses outside of an individual’s basic health plan coverage. For instance, a supplemental insurance plan may cover deductibles and co-pays, whereby the primary policy may not provide coverage. The primary insurance policy and the supplemental insurance policy may be issued by the same carrier or different carriers. Moreover, supplemental policies may be purchased through an employer-sponsored program.

Types

Different types of supplemental insurance policies can provide a variety of benefits. There are cancer supplemental insurance policies, accident policies and disability policies. The difference between these policies encompasses the types of medical benefits associated with the policies. For instance, cancer policies may cover chemotherapy and radiation; whereas, disability policies may provide coverage for lost wages resulting from injuries or illnesses.

Primary Insurance

The basic benefits under a primary insurance policy are distinctive of any supplemental benefits. Therefore, the primary insurance policy includes the full range of benefits stipulated in the insurance plan. If the primary insurance policy does not cover any additional expenses, the supplemental insurance may cover those added expenses.

Payment of Benefits

Unlike the primary insurance policy, many supplemental insurance policies allow payments to be made directly to the policyholder. Payments under a primary insurance policy are generally made to the doctor or health care facility. Supplemental insurance payments may cover lost wages due to certain medical conditions, and furthermore supplemental insurance benefits may cover expenses other than medical expenses.

Costs

Because supplemental health insurance policies typically provide lower benefits than the primary policy, the premiums for supplemental benefits are generally lower than the costs to maintain primary insurance benefits.

Preexisting Conditions

Many primary insurance policies do not provide payments of medical costs for preexisting conditions. There is usually a waiting period before the insurance carrier will allow payment for these costs. On the other hand, supplemental insurance plans may provide payments for the costs associated with preexisting conditions without a waiting period.

References

• Medicare: Medigap (Supplemental Insurance) Policies