What Is a Supplemental Insurance Policy and Who Needs It?

I’m going to assume the majority of people who are reading this are familiar with the Aflac Duck. The Aflac policy or the Aflac insurance company, is one of the main companies that provide what we call supplemental or ancillary insurance products. These would be products that give you benefits or coverage for specific categories or specific events such as a catastrophic event.

For example, if I’ve had a stroke or I had cancer or a heart problem, or I have a serious accident. Those are the common policies that are called supplemental or ancillary benefits. 

These policies do have a value. They have a place in the marketplace with no doubt for a couple of reasons. 

Two Reasons Supplemental Insurance Is Valuable

  1. Traditionally, traditional medical insurance—which we’ve talked about before in financial planning—health insurance would be the core of your financial plan. No one should be without health insurance. But with that, we’re finding under the health insurance products, higher and higher deductibles, more and more out-of-pocket expenses. These supplemental contracts provide benefits for specific incidents. They can provide cash or some extra benefits to help pay for those out-of-pocket expenses. So they do have a place.
  1. They do provide for some cash benefits for unexpected expenses or maybe some expenses that are not covered by my health insurance contract. Here’s one that can be very common: I’ve had a series of strokes. I’ve got a serious stroke situation and I need somebody who’s going to take time off of their work to take me to and from therapies or from my care, whatever the case is. What happens to that person in relation to how they lose their wages or their time just taking care of me? 

That’s where these extra cash benefits are applied to me. 

Cash Benefits Are Mine to Use as I Need


I can use those cash benefits in any way I wish. It could be for a caregiver, it could be for ancillary items. I want to really emphasize that in my opinion, these would be what I call second or third-tier policies. In other words, you should have a core insurance program strategy—call that my health insurance, my life insurance, disability, or retirement savings. Then, once that is secured or set up, having enrollment into these ancillary products absolutely can and should be considered and used.

If you want help looking into the best supplemental insurance policy for you, call us at (314) 544-5400.

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