The Case for Supplemental Insurance

The 2021 benefits open enrollment season recently wrapped up, and each year,

families assume their health insurance will cover their illness/injury-related

expenses, after they fulfill their deductible and co-pay requirements.


Unfortunately, this is far from a complete picture.


While health insurance pays many physician’s bills and hospital charges, out of

pocket expenses not covered by health insurance are often much greater than the

costs insurance covers.


If an individual is unable to work for several months to a few years due to Cancer, a heart attack, or an injury, their loss of income, combined with a barrage of unexpected expenses create a financial “perfect storm” that most families’

finances are not prepared to weather.


In fact, according to CNBC, “Two-thirds of people who file for bankruptcy cite

medical issues as a key contributor to their financial downfall.” (This Is The Real

Reason Most Americans File For Bankruptcy, 2/11/19)


A case in point:

The wife of a close friend was diagnosed with inoperable brain cancer in 2013.

While Paul’s employer-provided insurance required only a $1000 deductible and

covered over $2 million in medical expenses, his family’s out of pocket expenses

forced them to drain their savings and retirement accounts, and max out their

credit cards. Now, five years after Liz’s passing, Paul is still recovering from the

financial storm the family never saw coming.


This is where supplemental insurance, like those offered by my company (Globe

Life Family Heritage Division), plays a valuable role. While health insurance pays

for doctors, medical charges, and hospital bills, supplemental plans pay families

directly, to help them cover their bills if they’re sick or injured and unable to

work. Supplemental insurance benefits are paid in addition to any other insurance

an individual or family may have and can be used however the policyholder



Most supplemental insurance underwriters offer policies for Cancer, heart

attacks/strokes, accidents and injuries, and critical care events, accommodating a

range of budgets with affordable premiums. These plans typically have no

deductibles or co-pays, and some are guaranteed renewable for life, as long as

premiums are paid on time. Some policies are “lump sum” plans that max out

payments at a specified dollar amount, while others have no lifetime limits on the

number of claims submitted.


While these policies often protect families from significant financial hardship,

they’re not well-known; ninety-three percent of Americans do not have

supplemental insurance coverage. Of those that add these plans to their portfolio,

individuals and families make up the largest market, but businesses increasingly

fund them as employee recruiting and retention tools, or make them available to

their employees on a voluntary, employee-funded basis.


Questions? Comments? I can be reached at


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