We never expect a major accident or illness to change our lives, but the possibility is always there. The expenses that result can begin to pile up, including medical bills and unpaid expenses due to lost income. Supplemental insurance can help you financially prepare for these kinds of unexpected life changes.
Some people have health insurance through work, but it may not cover enough or might cost too much. For others, like the self-employed, retirees, part-time workers, or small business employees, company-sponsored health insurance isn’t an option.
To help bridge the financial gap you may face in covering health care costs, you may want to consider these three types of supplemental insurance:
As life expectancy goes up, the likelihood of needing long-term care increases, too. Medicare doesn’t cover everything, and state-provided Medicaid is usually only for people near the poverty line. Long-term care insurance may help cover some costs not covered by Medicare, such as nursing home care. This type of supplemental insurance can be expensive, but in the long run, it might be worth it to retain your hard-earned assets.
These are policies purchased in case of extended injury or illness. A good way to figure out how much you need is to estimate how much you spend monthly and how long a short-term disability policy might cover your expenses. Even if you have group coverage, a certain amount of individual coverage may be needed to fill any gaps.
If you have an HSA, you’ve made a proactive step toward saving for healthcare expenses. These are tax-deductible accounts that let you make withdrawals for any “qualified medical expense,” such as doctor visits, prescriptions, dental and vision care, and even over-the-counter medicines. These accounts are sometimes provided by your employer and may have other advantages, like pretax deductions.
However, many people use these accounts only for current expenses. HSAs also can be used to save for future medical expenses and can be a valuable part of your retirement plan.
It’s always a good idea to have three to six months’ worth of living expenses set aside in a bank savings account in case of emergencies. This could help you recover from a job loss, car repairs, hospital bills, or other expenses. Putting supplemental insurance in place also can help you be prepared for the unexpected.
There are many plans and types of supplemental insurance that can help you prepare and plan for a healthy financial future. Eligibility varies for each; a qualified insurance professional can help you decide which is best for you.
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