Life can be unpredictable. Nobody would ever get sick in an ideal world, and accidents would never happen. Unfortunately, that is not the case. In today’s day and age, individuals desire to feel secure and taken care of in the event of an accident or an untimely diagnosis. What if there was a way for employers to provide employees with that sense of security? Employers can give this sense of security by offering supplementary benefits.
What are they?
Supplementary policies fill the gaps where an unexpected expense could potentially come out of your pocket. In short, when there is an unpredictable event such as an accident or diagnosis that results in unexpected medical expenses, supplementary policies cover those costs. Generally speaking, there are two types of supplemental policies. These types of policies are accident and critical illness.
Supplemental Accident Insurance
Supplemental accident insurance covers out-of-pocket costs resulting from an accidental injury. There are two types of supplemental accident policies: lump sum and fixed benefit policies. With a lump sum policy, the insurance company will pay a set dollar amount to the beneficiary upfront to cover the costs of the accident. For a lump sum policy, dollar amounts typically range from $2,500 to $10,000 or are sometimes more. A fixed benefit policy has more factors than a lump sum policy. The beneficiary provides a list of treatments and services associated with the accident to the insurance company with a fixed benefit policy. The policy will pay that set amount.
Critical Illness Insurance
Although the dollar amounts are typically higher, a critical illness insurance policy is similar to a lump sum policy. Suppose the beneficiary is diagnosed with a critical illness outlined by the policy. In that case, the policy will pay said beneficiary a set dollar amount. In contrast to a lump sum policy, the typical range for critical illness insurance is between $10,000 and $50,000. Possible conditions covered by a critical illness insurance policy are heart attacks, loss of speech, hearing, or vision, life-threatening cancer, coma, major transplants and paralysis.
Supplemental Policies in a Corporate Setting
Individuals can purchase supplemental policies for themselves or their families. An employer can also provide supplemental policies as part of the company’s health insurance benefits. Whether a company offers supplemental policies or not is sometimes a deal breaker when qualified individuals are looking to apply for jobs.
Covered California. (n.d.). Supplemental Health Insurance Plans: Health for California. Health for California Insurance Center. Retrieved March 23, 2022, from https://www.healthforcalifornia.com/supplemental-health-insurance-plans
Kumok, Z. (2022, March 17). Critical illness insurance: Do you need it? Investopedia. Retrieved March 23, 2022, from https://www.investopedia.com/articles/personal-finance/010416/critical-illness-insurance-who-needs-it.asp
State Farm. (2021, May 27). Supplemental health insurance – state farm®. State Farm. Retrieved March 23, 2022, from https://www.statefarm.com/insurance/health/supplemental-insurance