You’ve planned. You’ve packed. You’re ready to go. But one thing you may have overlooked isn’t something you can carry in your suitcase. It’s insurance. Before you adventure near or far, you may want to buy insurance designed to cover you when you’re out having fun.
What is Supplemental Insurance?
Supplemental insurance can be thought of as “extra” insurance. It is insurance you can buy to cover out-of-pocket expenses that your regular insurance may not cover. It adds to—or supplements—the insurance coverage you already have.
For example, some forms of supplemental insurance may help cover expenses such as health insurance copayments, deductibles, and coinsurance. If you get hurt or sick, these are the costs you’re responsible for covering before your regular health insurance begins paying for care. Supplemental insurance can be a low cost option to help cover these bills.
Why Consider Supplemental Insurance?
You may want to buy a supplemental insurance policy to protect your hard-earned savings. Your plans may include riskier activities and you want to know that you can go all in without worrying about your wallet. You may want to simplify matters if something does go wrong, knowing that financial coverage is just a claim away. Finally, you may know that you can’t afford an emergency without paying for the relatively low cost of insurance upfront.
In the U.S., high deductible health insurance plans are increasingly common. This makes supplemental insurance plans all the more valuable. For some health insurance plans, deductibles may be $2,000, $3,000, or as much as $4,000 USD. Supplemental insurance policies can help ensure you’re not stuck paying all of these out-of-pocket expenses.
Further, unexpected or surprise medical bills can spring up even for those with health insurance. Many health insurance plans have different coverage rates for in-network vs. out-of-network care. Usually, you can plan ahead and seek care in-network. But in the case of an emergency or if you’re adventuring somewhere remote or out of the country, you may not have a choice other than to seek out-of-network care. Supplemental insurance can help cover some of the extra costs that could come with this.
Do I Always Need Supplemental Insurance?
As helpful as supplemental insurance can be, you may not always need or want it. You may only be looking for extra coverage when you will be taking on extra risk, like when you travel or spend time outdoors. That’s why we like to think of supplemental insurance as “adventure insurance.” During these times it may be a bit more likely that you’ll end up in the emergency room or in some sort of bind far from home.
While certainly not true of all policies, the good news is that there are forms of supplemental insurance that are on-demand. This means that you can buy a policy only when you need it and only for how long you need it. Instead of buying coverage for a standard term like a year, you can buy something tailored to your adventure. Let’s look at a couple versions of this.
Travel insurance is a type of supplemental insurance that protects you from certain financial losses when you travel. For example, if you get sick before a trip but it’s too late to get a refund for plane tickets and hotel reservations, travel insurance may reimburse you for the cost of the trip. Some travel insurance policies will also pay you if unforeseen circumstances cause missed flight connections or lost baggage.
Further, some travel insurance policies may provide coverage for emergency medical care and emergency medical transportation during your trip. If you’re traveling overseas this can be particularly helpful. Your regular health insurance plan may charge out-of-network rates or fees, but outside of the country there may be no way to avoid them. Travel insurance may step in to offset these higher than normal medical costs.
Travel insurance can be sold as on-demand insurance. This means you buy coverage for only a single trip if that’s all you need. If you’ve been saving for that big getaway it may be worth adding the peace of mind provided by travel insurance.
Another form of supplemental insurance is accident insurance. What is accident insurance? Accident insurance are policies that typically pay you directly if you get hurt. You can use the money to pay for out-of-pocket medical expenses like health insurance copayments or deductibles. Or you can use the money for whatever you need—lost or damaged gear, travel change fees, whatever.
If your adventure will include some outdoor sports, competitions, or a bit more physical risk-taking, accident insurance may be worth considering.
Some accident insurance policies are on-demand, allowing you to pay for only the coverage you need, when you need it. To find a policy like this, look for one that allows you to customize the term. Term is insurance-speak for the length of coverage. That way you can pay for only the coverage you need.
Finally, there are some related insurance plans called accidental death or dismemberment policies. These policies pay your loved ones or you if you die or lose the use of a limb due to an accident. These policies may make the most sense if you know you’re going off to do something especially awesome (i.e. especially dangerous).
Do I Need Adventure Insurance?
You don’t need insurance to adventure of course, but it may be just the peace of mind you need to really enjoy it. Before you buy any insurance policy remember to check the details of that particular policy. Understand what is and isn’t covered and how to file a claim.
Now that you know about a few types of supplemental insurance, you can better weigh your options before you jump on that plane or head to the mountains. Stay safe and have fun out there.