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What is supplemental health insurance?

Are you seeking ways to help protect your budget from medical expenses and wondering if supplemental health insurance may be right for you? Check out this Q&A for everything you need to know!

Q: What is supplemental health insurance?

Supplemental health insurance is a type of policy that helps protect you and your family from out-of-pocket costs associated with serious illness or hospitalization. Supplemental health insurance is meant to be purchased in addition to your major medical insurance or Medicare coverage, and it complements your existing coverage by paying benefits regardless of your current plan.

Q: Are there different types of supplemental health insurance?

Yes! There are various supplemental health insurance products that offer different types of financial protection. Here are two popular types of supplemental health insurance plans:

  • Critical illness insurance: Helps protect you from the out-of-pocket costs of cancer, heart attack and end-stage renal failure. It can also cover conditions such as Alzheimer’s disease, blindness, paralysis, coma, transplant surgery/waiting list, amputation and deafness.
  • Hospital indemnity insurance: Helps protect you from out-of-pocket costs when you’re hospitalized due to a covered accidental injury or illness. Coverage options may include a daily hospital stay, day one hospital admission, intensive care unit, emergency room visits, ambulance trips and more.

Q: How are benefits paid?

You’re probably familiar with how major medical insurance and Medicare pay benefits to your health care providers. Supplemental health insurance is different because it pays cash benefits directly to you, not to doctors or hospitals. You can use the money for any need, including medical bills and living expenses.

Q: How does supplemental health insurance work?

Supplemental health insurance is as simple as 1…2…3!

  1. You experience a covered illness, injury or condition.
  2. You receive medical care.
  3. Supplemental health insurance helps when you need it most by paying cash benefits directly to you. Use the money to help cover your deductible, coinsurance and living expenses.

Q: Why do I need supplemental health insurance if I already have major medical or Medicare?

Good question! Major medical insurance and Medicare can provide good coverage, but they may also leave you exposed to out-of-pocket costs. For example, Medicare Part A has a $1,600 deductible that you must pay for a hospital stay in 2023 before benefits kick in, and Medicare Part B has a $226 deductible, plus 20% coinsurance that you must pay for each Medicare-approved item.1 Supplemental health insurance can help by paying benefits directly to you, which you can use to help cover these out-of-pocket costs or to pay for living expenses while you’re on the mend.

Q: What are the odds of using supplemental health insurance?

Unfortunately, critical illness and hospital stays are probably more common than you think. Consider these statistics:

  • 1 in 3 Americans may develop cancer in their lifetime.2
  • Someone in the U.S. has a heart attack every 40 seconds.3
  • More than 795,000 Americans have a stroke each year.4

Looking to improve your health? Learn everything you need to know about preventive care!

Q: How much does supplemental health insurance cost?

Supplemental health insurance premiums vary by plan and carrier, but are typically considered to be very affordable!  Premiums are determined by the amount of insurance coverage you require, your age, tobacco classification, and what type of policy you request.

Q: How do I get supplemental health insurance?

Get in contact with a Bankers Life agent to get started! Your agent will listen to your concerns and needs and help you determine which supplemental health insurance product is right for you. Next, you’ll complete an application, and our underwriters will review your medical history to determine if you’re approved for a plan.


1National Council on Aging, What You’ll Pay in Out-of-Pocket Medicare Costs in 2023, https://ncoa.org/article/what-you-ll-pay-in-out-of-pocket-medicare-costs-in-2023, 2022.

2American Cancer Society, Lifetime Risk of Developing or Dying from Cancer, https://www.cancer.org/cancer/risk-prevention/understanding-cancer-risk/lifetime-probability-of-developing-or-dying-from-cancer.html, January 2023.
3Centers for Disease Control and Prevention, Heart Disease Facts, https://www.cdc.gov/heartdisease/facts.htm, May 2023.
4Centers for Disease Control and Prevention, Stroke Facts, https://www.cdc.gov/stroke/facts.htm, May 2023.

Bankers Life is a private company that is not Medicare, Medicaid or MaineCare and is not a governmental agency