Types of Supplemental Health Insurance

Supplemental health insurance is very different from a standard primary health insurance plan that typically makes payments directly to the service provider. The supplemental plan is second in line, either reimbursing the policyholder for expenses like deductibles or paying a flat amount per day or per illness, based upon the plan's coverage.

Basic Supplemental Health

• Some traditional health insurance plans, such as major medical policies, have co-payments and deductibles. Basic supplemental health plans cover these out-of-pocket costs.

Hospital Indemnity

• These plans make cash payments directly to the policyholder. The payments could be for a specific hospital procedure or based upon the number of days in the hospital. Often, with certain procedures it is necessary to be in the hospital for a minimum number of days.

Accidental Death and Dismemberment (AD&D)

• AD&D pays a specified amount for accidental death or loss of limb or eyesight. Depending upon the policy, it might also pay for expenses incurred from an accident such as co-pays and help in the home.

Medigap

• Medigap plans are meant for people on Medicare and help to cover gaps in Medicare coverage such as co-payments and deductibles.

Disease Specific

• These are sometimes called Critical Illness plans and they pay a lump sum if the policyholder incurs the specific disease, typically cancer, Alzheimer's or a heart attack.