Different Types of Supplemental Insurance Policies
Short-term health insurance, sometimes called interim health insurance, is an option intended to offer coverage in between your normal insurance policy when you are switching jobs, for example during a transition. These policies are different than regular supplemental insurance, though. Most people do not typically think of these kinds of plans to pay for preventative medical care, like annual check-ups, since the expectation is that they will have a year-long insurance policy in place when they get hired. If this is the case, however, a short-term policy can be helpful to protect you while your regular policy is still in effect. Read on to learn more.
Short-term policies can be compared to Medicare Advantage Plans and supplemental insurance made by private insurance companies. Both of them share some of the same features, including protection from premiums being raised to your previous Medicare rate, but the differences end there. Supplemental Medicare insurance only covers the “gaps” in Medicare, while an Advantage Plan can cover everything that Medicare did, plus some additional services, at a higher premium.
Both policies may pay a monthly dividend. Some policies may pay you a lump sum cash benefit if you die within a specified time after joining the plan. This may be the only coverage you receive under the policy. Some policies may pay your beneficiaries for their care after you die. These can be very generous, since the bulk of your benefits will likely go to your beneficiaries.
Supplemental policies, also called catastrophic policies or last-run plans, are designed to fill in the gaps left behind after regular Medicare and supplemental coverage. If you join a Medicare part A and B, then you’re eligible for a basic indemnity. If you also qualify for Medicare part A and B plus additional benefits, you’ll qualify for a more generous “bonus” indemnity. If you’re between these two income brackets, you may qualify for a “silverback” indemnity. With most of these plans, your premium payments reflect the additional benefits and the additional costs incurred to meet the plan’s requirements.
Some supplemental plans may pay the cost of your out-of-pocket expenses when you become seriously ill or permanently disabled. Your cash benefit paid into the account would provide for your medical expenses, including prescription drugs, doctor and hospital costs, and other in-home care. With this type of plan, your death benefit would cover expenses that would have been provided for on Medicare. Your disability benefit would take over expenses that Medicare would have provided, including your loss of wages due to your illness or permanent disability.
Supplemental insurance policies can be a valuable way to protect your financial protection. They generally offer high levels of medical coverage at affordable premiums. However, you should carefully review each policy and consider its various benefits and costs before you decide if it’s the right choice for you. Be sure to choose a policy that offers you enough protection to adequately cover your health care needs and that you’ll be able to afford the premium payments. You should also carefully review the terms of the plan and look for any possible negative clauses that could erode your coverage or affect your ability to make claims.