Specialty Benefits Pt. 2: 7 Types of Specialty Insurance
When you think about insurance coverage, what’s the first thing that comes to mind? Medical? Dental? Or is it Disability and Life? What about Critical Illness? Insurance is about all of these and more, but really, insurance is about money – having the right financial protection in place should something unexpected happen that results in bills you don’t have the funds on hand to cover.
Benefits in addition to medical (sometimes called supplemental, ancillary, voluntary or specialty) are important and shouldn’t be treated lightly. Why? Because medical benefits only go so far to cover individuals for expenses that could be incurred in the event of an illness or emergency. The 7 main additional, or “specialty,” benefits that usually work hand-in-hand with medical benefits to provide complete protection, depending on an individual’s specific needs, are:
1. Vision – May cover regular eye exams, updating prescriptions, and payments toward eyeglasses or contact lenses. Vision plans vary by network size and options, require copays and co-insurance, and even discounts offered.
2. Dental – Helps pay for regular dental checkups and some restorative treatments. Plans vary in how they deliver care and how much they pay. Most plans cap how much they will pay each year. A dental plan will cover preventive care, such as scheduled dental exams, X-rays and cleanings, but other services such as fillings and extractions may vary by plan.
3. Life – Provides a tool that helps safeguard a family’s financial future. To buy Life insurance, monthly premiums are paid to an insurance company that agrees to pay a specific amount to designated beneficiaries in the event of the policy holder’s death. A primary beneficiary can be named, as well as a contingent beneficiary who would receive benefits if the primary beneficiary dies before the policy holder does. With Life insurance, financial resources can go toward final medical expenses, funeral and burial costs, mortgage, housing and other bills related to daily life.
4. Disability – Pays a cash benefit in the event a medical situation causes one to miss work and therefore lose salary. Short Term Disability insurance helps replace a portion of income when one can’t work due to illness or non-work related accident for anywhere from a few weeks to a few months. Long Term Disability insurance helps replace a portion of income when one can’t work over an extended period of time. Picking the right amount of coverage is important.
5. Accident – Helps provide additional funds that may not be covered by a medical plan if one is hurt in an accident. The money can be used for anything including copays, deductibles, and/or co-insurance, travel (including costs for flying in loved ones), over-the-counter medicines, physical therapy, child care, and more.
6. Critical Illness – Helps to meet expenses such as copays, co-insurance, and deductibles for conditions covered in the plan, including cancer, heart attack, or stroke, among others. A diagnosis, pathology report, or evidence of hospital admission may be submitted in order to receive a lump sum payment.
7. Hospital Indemnity – Ensures a cash payout for every day spent in the hospital (up to a specified maximum) to help cover additional costs – such as home and family expenses, insurance deductibles, and copayments – even if the insured already has traditional health insurance benefits.
To learn more about the distinctions of supplemental vs. ancillary vs. voluntary benefits, see, “Specialty Benefits Pt.1: What are Supplemental, Ancillary and Voluntary Benefits?”