Supplemental insurance products are insurance policies that cover specific risks. Many supplemental insurance products are offered via workplace marketing programs but they can also be purchased on an individual basis. Aflac and Colonial Life are two of the most well-known supplemental insurance providers. Some of the most common supplemental insurance programs are for disability, accidents, dental and vision, and dread diseases and critical illnesses.
Worksite marketing
Supplemental insurance is most often offered to employees via worksite marketing programs. Insurance agents offer the coverage to employees at no cost to the employer and the premiums are deducted from the employee's paycheck automatically. Supplemental insurance appeals most to blue-collar employees and is often offered in machine shops and at construction sites. Employees at these companies have careers that cause traditional forms of disability and health insurance to be quite expensive.
Disability insurance
Short-term disability policies replace lost income when a breadwinner isn't working due to sickness or injury. Short-term disability coverage usually lasts 90 to 180 days and is designed to cover illnesses or injuries that have quick recovery times.
Long-term disability coverage is less commonly offered by supplemental insurers than short-term coverage but it works similarly. Long-term coverage starts after short-term coverage ends and lasts for a specified period of time, such as 10 years or until age 65.
Vision and dental coverage
Many employers can't afford to provide vision or dental coverage for their employees. Insurance for vision and dental expenses is relatively inexpensive and often makes good sense for large families. Major dental repairs such as crowns and fillings can be costly without the insurance, and vision checkups are always a good idea for those who wear glasses or contacts.
Dread diseases and critcial illness
Dread disease and critical illness coverage pay benefits for insureds under treatment for sicknesses such as cancer, stroke or heart attack. These types of policies can be structured to pay benefits in a lump sum or as coverage is needed.
Critical illness and dread disease insurance contracts have fairly low claims experience but have high benefit-to-premium cost ratios.
Accident coverage
Accidental policies offer very broad coverage. Accident policies pay benefits when insureds are admitted to a hospital or in intensive care due to an unexpected injury. According to Aflac, "dislocations, fractures, eye injuries, broken teeth, paralysis, burns, lacerations and concussions" are common instances where accident coverage would be beneficial.
Tags: dental coverage, disability coverage, insurance products, marketing programs, often offered, short-term coverage, Short-term disability
