4 Ways to Use Your Supplemental Insurance Payout

4 Ways to Use Your Supplemental Insurance Payout

1600 1067 Stefanie OConnell

When life hands you an emergency, the last thing you want to have to think about is money. But ignoring the financial side of most crises just leads to more stress down the road. It’s moments like these when you should thank yourself for actually sitting down and buying the right health insurance all that time ago, because good coverage means that when the unexpected does come, you don’t have to worry about money. That part of the equation has already been taken care of.

A supplemental insurance payout is a great example of this benefit in action. When you make a claim against your primary insurance policy, the benefits are paid to your hospital or doctor. With a supplemental policy like critical illness or fixed indemnity insurance, on the other hand, the money goes directly to you. This gives you the flexibility not only to cover your outstanding medical expenses but also to maintain overall financial stability when an emergency strikes.

How to Use Your Payout

There’s a range of ways you can use the money you get from your supplemental plan to keep your life on track, but it’s not a free pass to clear your Amazon wishlist. Here are four smart ways to use your supplemental insurance payout.

  • Copayments, coinsurance and deductibles. Your supplemental health insurance may cover some of the out-of-pocket expenses entailed by your primary health insurance plan, for instance deductibles, medications and hospital services.
  • Travel and lodging. If you’re traveling to see a specialist or get treatment at a hospital that specializes in your condition, you might find your travel expenses, from plane tickets to hotel charges, adding up. Your supplemental insurance payout can probably help cover these costs.
  • Lost wages. The time you spend recovering in the hospital after an accident or at home recuperating from an illness is time you can’t spend at work, earning your usual income. Your supplemental insurance payout can offer stability by providing an alternative source of income during your recovery.
  • Bills. A supplemental policy like critical illness insurance pays out a cash benefit when you receive a diagnosis of cancer or suffer from a heart attack or stroke. While you can use this cash benefit to pay for medical expenses not covered by your primary insurance, the money can also go toward maintaining your financial health — paying for your electricity, internet service or even your rent — as you work through the recovery process.

What to Know Before You Get Your Payout

In most cases, the payout process is simple. You receive qualified care or services, file a claim with your insurer and receive a check in the mail. From there, the money is yours to spend as needed.

Depending on your policy, circumstances and preferences, you can either receive your supplemental insurance payout as a lump sum or in increments over time. If you’re anticipating a long recovery process after an injury, for example, you may want to opt for smaller but more frequent payments as you go through recovery to help maintain financial stability. When purchasing supplemental insurance, it’s important to understand exactly what will be covered under the policy as well as when and how payouts are triggered. Review your plan options and contact your local broker to figure out what level of protection you’ll need.

With added benefits and the flexibility to use your payout in the way that best suits your needs, supplemental insurance can help ensure that a medical emergency doesn’t also become a financial emergency. Handle whatever crisis comes your way without stressing about the checks you’ll have to write — with supplemental insurance, the only check on your mind should be the one coming to you.

Stefanie OConnell

Author of the book, "The Broke and Beautiful Life," Stefanie O'Connell has been dubbed 'a financial expert, helping millennials feel as confident with their money as they do in their lives.

All stories by:Stefanie OConnell

Stefanie OConnell

Author of the book, "The Broke and Beautiful Life," Stefanie O'Connell has been dubbed 'a financial expert, helping millennials feel as confident with their money as they do in their lives.

All stories by:Stefanie OConnell