Is supplemental insurance worth it?

There are many reasons to consider supplemental insurance benefits at work. But before you decide if it makes sense for you – and which type to get at open enrollment or when you start a job – you should know about the main types of supplemental insurance and how they work to help protect your financial well-being.

What is supplemental health insurance?

Supplemental insurance doesn’t pay the hospital or cover your medical expenses – that’s what traditional health insurance is for. But when people get injured or are diagnosed with a serious illness, they often face all sorts of expenses for care that are unexpected. Care costs that one or more types of supplemental insurance can help offset. Supplemental insurance plans can help protect your financial well-being from these unexpected expenses by paying benefits directly to you.

How supplemental insurance works

There are different types of supplemental insurance plans, and many employers offer them as "voluntary" (i.e., employee-paid) benefits to help provide added financial stability to their workers. These plans may provide you with a fixed benefit payment or lump-sum payment made directly to you – not the health care provider – when you experience a covered illness or injury or get a covered treatment or service. Benefit amounts vary by plan, severity of the diagnosis, and other factors, and the claims process is typically straightforward: you can usually file online and upload proof of diagnosis or a service received. Soon after, the benefit payment is paid directly to you, and you can use the money to help cover out-of-pocket care costs and other injury or illness-related expenses.

3 main types of supplemental health insurance

Accident insurance

Accident insurance provides lump sum benefits for accidental injuries requiring treatment, urgent care, or hospitalization, including common injuries such as burns or fractures. Plans vary but may pay a lump sum benefit for diagnosis, treatment, and recovery services like family care and lodgings. Payments are paid directly to the insured based on covered injuries and services, regardless of whether a health insurance plan also covers treatment costs.

Some accident plans may also provide an optional wellness benefit and an additional benefit of up to 25% for covered children injured while participating in an organized sport.¹

Critical illness insurance

Critical illness insurance pays a lump sum benefit based on the diagnosis of different kinds of covered chronic and debilitating illnesses such as stroke, heart attack, cancer, Alzheimer's disease, and Parkinson's disease. Some plans may go beyond coverage for traditionally serious health events and pay optional lump sum benefits for things like family planning treatments, mental health support, health screenings, and other expenses. For example, Guardian plans can pay benefits for preventive measures taken as a result of having a BRCA1 or BRCA2 genetic mutation.

Hospital indemnity insurance

Hospital expenses can add up very quickly. According to Healthcare.gov,² the average price of a three-day hospital stay is approximately $30,000 – and even with traditional health insurance, you may be responsible for deductibles and co-pays. During or after a hospitalization, there can also be a variety of extra expenses as you adjust to any changes in your daily life.

Hospital indemnity insurance can provide needed financial help at a stressful time by paying a lump sum benefit payment directly to you based on admission and days hospitalized. Some plans also offer a health screening benefit. And just like other types of supplemental insurance plans, you can use the money you get to help cover your care costs and other expenses.

Supplemental insurance cost considerations

Supplemental insurance costs vary depending on the type of plan, conditions covered, and benefits offered. While you may be able to purchase some types of supplemental insurance plans as an individual, plans offered by your employer may have better rates than an individual plan. Benefits through work are also convenient to get and pay for via payroll deductions.

Which supplemental insurance plan is worth getting?

It's stressful when unexpected bills appear because of illness, injury, or a medical issue. You want to be able to focus on healing, not finances. But if your employer offers different types of supplemental insurance, how do you choose? The answer depends largely on your concerns about potential health issues. For example, if you have a history of cancer in your family, you might want to opt for critical illness or cancer insurance. Or, if your child is active in sports that could cause harm or injury, accident insurance could be especially appealing. But it doesn't have to be an either/or choice. With generally affordable rates, many people may opt for multiple kinds of supplemental health insurance for a more complete financial health.

How to get supplemental health insurance

A growing number of companies offer supplemental health insurance as a voluntary workplace benefit. Ask your supervisor or HR department whether any plans are available as part of your employee benefits. And if you'd like more information about deciding which employee benefits are right for you, here's a guide that can help.

Why many employers offer Guardian supplemental insurance benefits

The financial support that supplemental insurance benefits provide may help make all the difference to employees and their families. Whether it’s withstanding a sudden medical emergency or staying afloat during a covered treatment for a serious diagnosis, Guardian’s supplemental insurance options help offer employers a cost effective way to support their employees’ well-being.