We’ve discussed why you should consider life insurance in the past. I personally feel that life insurance is an important thing to consider for any individual, but especially parents. But what about other types of insurance? Did you know that there several types of supplemental insurance in addition to life insurance? Today we’re going to talk about why families should consider supplemental insurance. And yes, I realize, this may seem like a boring topic but I still think it’s something important to consider.
Many working families, at the very least, have medical insurance. Some may also have dental insurance. And, many individuals also have car insurance, and homeowners or renters insurance.
But what about supplemental insurance? And is it something that families really need?
If you have an insurance policy that has coverage gaps, you may need to purchase something called “supplemental insurance.” This means simply that it is in addition to the insurance coverage that you already have. It is usually a secondary payer and only pays after the first insurance has paid.
First, let’s talk about the types of supplemental insurance available.
A few types of supplemental insurance are:
* Disability – Coverage you can purchase that will pay cash benefits to you for lost wages, household help, and even for home delivery if you are disabled.
- Many people mistakenly believe that the Social Security Administration will provide adequate financial assistance if they become disabled, but that’s not true in all cases. In fact, more than 59 percent of disability claims are denied by the Social Security Administration.2
- In addition, workers’ compensation only covers on-the-job injuries and disabilities, and considering that off-the-job injuries are three times more common than on-the-job injuries, having disability insurance can help you avoid devastating financial situations resulting from an unexpected accident that may leave you unable to work.1
- Short-Term Disability insurance pays a percentage of your income if you are unable to work due to a covered illness or injury. Benefits are paid directly to you, unless otherwise assigned, to help cover things like deductibles, car payments, utility bills and more.
- Those who should consider this product –
- Parents with young children and/or other dependents.
- Those who agree they should take better care of their health (feel stressed or need more sleep and a better diet).
* Accident – Sometimes the coverage you have through your health insurance is lacking so you can purchase additional accident coverage to help cover issues that might come up.
- The National Safety Council indicates that the average medical expense for an accidental injury is $5,500. And according to the Centers for Disease Control, there are more than 80 million injury-related visits to doctors’ offices, hospital outpatient departments and emergency-treatment facilities in the U.S. each year.4
- Accident insurance helps provide everyday financial protection in the event of a covered accident. Benefits are paid for things like x-rays, physical therapy, appliances, emergency treatment and more.
- Those who should consider this product –
- Everyone, especially parents with accident-prone children as well as active adults (athletes and adventure-seekers).
* Life – In addition to a regular life insurance policy, you may find that you need more insurance as you age. Instead of redoing the first policy it can often be beneficial to pay for a small additional policy.
- Life insurance is not a one-size-fits-all benefit, but it is something to consider, no matter what stage of life you are in. In fact, 50 percent of U.S. households (58 million) say they need more life insurance.7
- For those who are young and single, life insurance can be used to cover funeral/burial expenses, pay off creditor debt or provide parents with funds for retirement. If you are a mom or dad, benefits can help cover your child’s college education, or help your spouse continue to pay the mortgage or any other financial need following the loss of a loved one.
- Those who should consider this product –
- Generation Z and millennials/Generation Y, who may have student loans co-signed by parents or other loved ones.
- Parents with young children and/or other dependents.
- Baby boomers approaching retirement age.
Most supplemental insurance really works just like regular insurance, but a lot of times it pays directly to you instead of to others. This which means you’ll be required to file the paperwork yourself. But, if you are short on savings and do not have a high tolerance to risk, you may want to look into getting supplemental insurance.
But why would you need supplemental insurance in the first place?
The most common types of supplemental insurance are health-related insurance that pays directly to you if you’re injured (disability) to help cover your expenses due to lost wages, or that pays uncovered health care costs from your other insurance. Combined with regular insurance it can help mitigate financial crises.
Look for Gaps in Coverage
To figure out where you need insurance, go over your coverage with a fine tooth comb. It can help if a qualified agent, with a company you want to work with, is helping you. They can help you figure out where you may be short on coverage. Look at each type of insurance that you have to figure out where you have to come out of pocket too much, or where you have no coverage when you thought you did (such as drug coverage).
So do families need supplemental insurance?
I would highly encourage you to consider it and here are my five reasons why:
- Accidents happen. And if an unfortunate accident should happen to you that puts you out of work for an extended period of time, having supplemental insurance just may be what your family needs to get by.
- Debt happens. Whether it’s from credit cards, student loans, or whatever reasons- debt does happen. And after the loss of a loved one, those debts get passed on. Having supplemental insurance like life insurance can help your loved ones with your debt. It can also help provide your loved ones with a source of income in your absence.
- Life happens. Every morning when we wake up, it’s a new day. And every day could bring about any given situation. We could win the lottery, lose a job, etc. Anything could happen to us. Having supplemental insurance helps us to prepare for that anything.
- Gaps happen. Even if you think you might be covered by something in your existing insurance plan, you may not be. Take the time to read the fine print of your insurance policy (even if you’ve been saving it for bedtime or bathroom reading) and figure out what you are covered for. Whatever you aren’t covered for- just may be the reason that you should consider supplemental insurance.
- Age happens. As we get older, our insurance needs will change. What we may not have needed as a teenager or young adult, we may find ourselves needing in our 30s. Be sure that your insurance grows with you and accommodates your needs as you get older.
Different generations have different health care needs that reflect their life stages
- Today’s workforce is comprised of a number of different generations, including baby boomers, Generation X, millennials/Generation Y and the incoming generation of workers known as Generation Z.
- Many of today’s families are also spanning more generations than in the past, which means one-size-fits-all benefits options aren’t enough anymore.
- For instance, the type of benefits options a young, single employee needs are significantly different than those for an employee who is supporting multiple dependents or facing more health issues due to advanced age.
- That’s where voluntary insurance helps, since it allows employees to select voluntary policies that best suit their own needs, as well as the needs of any dependents they may have.
So that’s all well and good, but when can you enroll for supplemental insurance?
What is Open Enrollment, and why should I be thinking about it?
- For most U.S. companies, fall marks open enrollment season, a time when workers can review their employer-sponsored benefits offerings and choose the health insurance policies that best meet their financial and health care needs.
- Although selecting the right health care benefits may be one of the most important decisions Americans will make all year, an Aflac survey found that many workers do very little research to learn which plans and products really work best for them.
- In fact, 34 percent of employees spent 15 minutes or less researching their benefit options in 2014.1
- Those who don’t set aside time to research their insurance options often end up with inadequate health care protection for themselves and their families.
1. 2015 Aflac WorkForces Report conducted in February 2015 by Research Now on behalf of Aflac, accessed Sept. 2, 2015 – http://workforces.aflac.com/
2. Centers for Disease Control and Prevention, “Heart Disease Facts,” accessed Sept. 2, 2015 – http://www.cdc.gov/heartdisease/facts.htm
3. Injury Facts, 2014 Edition, National Safety Council
7. LIMRA, “Facts About Life,” accessed Sept. 2, 2015 – http://www.limra.com/uploadedFiles/limracom/Posts/PR/LIAM/PDF/Facts-Life-2013.pdf
Trust me, I know, insurance is not the most exciting topic but it’s also a topic that I don’t think we can ignore. We’ve talked about a few reasons why families should consider supplemental insurance.
Why do you think families need supplemental insurance?
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.
Kori
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This is great information for anyone needing to make a decision! It can be a hard decision on what is the right insurance needs for your household.
My husband gets awesome dental and medical coverage at work (for the things that our health care doesn’t cover) but we still have additional insurance for living expenses and other things that could pop up if one of us becomes ill. It really does make me feel safer having it in place.
I think it’s very important to have supplement insurance although not many can afford that extra expense. You really need to think out your options and then decide.
I will have to check on the accident insurance supplement –
And yes I have friends that are on the Disability Ins and it is not very much at all!
Thank you for this info 🙂