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Is Supplemental Health Insurance A Good Idea Or A Rip Off?

pros and cons of supplemental health insurance

Does Aflac really have you under their wing?

Supplemental health insurance plans, made popular by that annoying duck on the TV commercials, are on the rise. Aflac and its duck are now insuring over 40 million people. It’s very possible your employer might have had a presentation at work about the benefits of supplemental health insurance. With deductibles on the rise and actual coverage on the decline, it might seem like a good idea. How do you know if you need supplemental insurance coverage or if it’s a rip off?

What is Supplemental Health Insurance?

For those of you who aren’t familiar, supplemental insurance companies pay cash benefits for various health maladies like diseases, injuries, or hospitalizations. Their claim to fame is that they pick up the slack on things regular health insurance doesn’t cover. Because supplemental insurance companies pay cash fairly quickly after a health problem arises, agents will try to sell the idea that Aflac takes over if you are unable to work or need time off to care for loved ones undergoing health crises. Their money pays the rent while your health insurance supposedly pays the medical bills.

The amount of money paid out varies depending on the policy and what is wrong. With a cancer policy, you could get $10,000 after an initial diagnosis of internal cancer. For an accident policy, if you need to go to the emergency room for a cut finger, you might get $100. It’s kind of like life insurance, money you never hope to use but are probably glad to have if things go wrong.

It’s kind of morbid but also entertaining to read through the payouts for covered diagnoses and procedures.

In relation to cancer…..

  • Radical Neck Dissection $1800
  • Enucleation (where they cut out your eyeball) $500
  • Brain Tumor Excision $3500
  • Complete Hysterectomy $5000
  • Chemotherapy $3000 for initial treatment and then $400 per month while under treatment

In relation to accidents….

  • Loss of both arms and both legs $40,000
  • Loss of two eyes, feet, hands, arms, or legs $40,000
  • Loss of one eye, foot, hand, arm, or leg $10,000
  • Loss of one or more fingers and/or one or more toes $2,000
  • Hernia $1250
  • Broken tooth with extraction $130
  • Concussion $50
  • Hospital Admission after an accident $1200 for regular admission plus $300 a day or $2400 for intensive care admission plus $480 per day.

There are pages of conditions and treatments, almost like a la carte shopping. I got two broken finges and a head laceration, how much is that? I also think an eye should be worth way more than $500!  I joke and giggle, but I’m sure it would be much more serious if I were in the midst of a medical crisis.

How Much Does Aflac Cost?

I’m sure the cost varies depending on where you live and what type of policy you want. I signed up for an accident policy covering myself and my daughter plus a whole family cancer policy a few years ago after we had two emergency room trips in the same weekend for an accident. I also paid extra for a short term disability benefit because my long term policy does not kick in for 90 days.

Since my daughter and I have a $10,000 deductible on our regular health insurance policy, I thought it might be helpful to have extra coverage. We did not have $10,000 in savings back then. Emergencies often meant extra credit card debt. Thankfully, since we signed up for Aflac, we haven’t had any emergencies, but you never know when one of us might lop off a toe or fall out of a tree.

For the cancer policy, the cost is $47/month, and the accident coverage is $76/month. That isn’t the true cost because it’s pre-tax money from a payroll deduction, making our cost closer to $89 a month or $1068 per year.

Wellness Benefits

We actually aren’t out $1068 per year because Aflac pays wellness benefits. The accident policy pays a one time benefit of $60 a year for any type of medical or dental preventative visit by myself or my daughter. The cancer policy offers around $180 per person every year if we have any cancer screening tests, like PSA labs, colonoscopy, mammogram, Pap smears, all the fun stuff you get to do when you get older. Jim and I both have an annual physical plus whatever tests our doctors think is appropriate. I’d say we average about $300 a year in total benefits from Aflac, making the actual cost for both policies about $768.

Is It Worth It or A Rip Off?

Our Aflac open enrollment is in June. Every year, I tell myself I’m going to cancel, but never do. It always seems that someone I know has a terrible car accident or gets diagnosed with cancer right around that time, and I decide to keep it just in case. This year, I will try not to let emotion take over and decide based on the facts.

You Probably Don’t Need Supplemental Insurance If You Have An Emergency Fund

We now have more than enough money in a health savings account to cover our gargantuan deductible. I hope to save this money for retirement, but we could use it if there was a big emergency. For people who don’t have adequate emergency savings and have a high deductible health insurance, Aflac might be a viable option to cover the gap, but I would work very hard to build up savings instead of relying on supplemental insurance. In fact, if you can’t afford to save and cover the premiums, I would probably choose building an emergency fund over Aflac or similar policies.

Aflac in no way takes the place of having medical insurance, and it is not ACA compliant. One major accident or illness could cost over $100,000. The duck is not going to cover anywhere near that amount unless you die! In that case, your family gets a pretty big payout.*

I also don’t really need short term disability insurance now that we have adequate savings. If I become disabled tomorrow, we could make it 90 days until my long term policy picks up the slack.

My Secret Fear of Cancer

I am pretty sure that I’m cancelling the accident policy, but what about cancer coverage? I know lots of people scoff at disease specific plans. Why would you take out a policy for only one particular problem?

I have a few unfounded fears. Spiders and birds are the benign ones I deal with on a daily basis. My other strange fear is that I will be diagnosed with cancer. It’s not strong enough to keep me up at night and I don’t think I have a brain tumor with every headache, but it’s a real fear.

I think part of it comes from seeing an aunt, uncle, and my Mom’s best friend pass from cancer at fairly young ages. Also, with my profession, I have access to lots of medical histories. There are tons of people who get cancer. It’s not just morbidly obese, chain smokers who sleep in tanning beds. There are healthy, young people who get cancer. In fact, one in four of us will end up with cancer at some point in our lives. That’s scary!

I will do everything I can as far as exercise, eating right, avoiding carcinogens, and lowering stress, but it still might happen. If that’s the case, I want to be able to fight with all I have and not worry about having to work x number of days to pay the bills. We could manage on Jim’s salary, but what if he needs to take more time off to help around the house or take me to the doctor?

I know the benefits Aflac pays would not cover all expenses, but it would be a help. I’ve actually talked to more than one person who has gone through chemotherapy with Aflac. All were more than grateful for the added benefits. Things like payment for overnight accommodations and $500 for each treatment were life savers to their finances.

I think this is why for about $300 a year, I’ll probably keep the supplemental insurance for cancer. It may be a stupid thing to worry about, but I’ve found that if you worry about the stupid things before they turn into serious issues, you’re one step ahead of the game.

Do you think supplemental insurance is a rip off? Do you have any secret disease fears?


Image: Flickr



About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. My father died from a colon cancer and unfortunately his life insurance didn’t cover a cancer policy. It was so hard for us when he was gone, financially and spiritually.

  2. I don’t really see the benefit in Aflac. But hey, to each their own. When I was at my old job, we had no fewer than ten Aflac representatives stop by to try to sell us policies. It was the ongoing joke in our office!

  3. I think, in theory, supplemental insurance is a good thing. However, as you pointed out, I’d hope that many of the items on the list would be worth considerably more. With regards to cancer insurance, I saw that being sold a lot when I worked in life insurance but the few benefits never seemed to outweigh the cost of the plans.

  4. I always wonder about getting Aflac for ourselves but can never seem to make the call. We have an HSA that we fund up to the limit every year and it has served us well thus far for the extra costs, but a cancer diagnosis and cost does scare me.

  5. I think supplemental health insurance has it’s place, but looking at the US as a whole it’s been SO difficult to get everyone on health insurance. I’m not saying the plans on exchanges are good, but the risk of bankruptcy is so high if you don’t have any health insurance. I think most people would benefit from contributing the max to their HSA, but I honestly know very few people who contribute ANYTHING to their HSA (let alone even know the benefits of their HSA…).

  6. I think supplemental insurance could be a good thing if it makes sense financially. I guess you have to know how far to take it because you could probably spend your entire paycheck on different insurances. Most companies don’t want to touch me with a 10 foot pole since I have had melanoma and Hashimoto’s. I can’t even purchase life insurance. Because of this, I have purchased life insurance for the kids so they won’t ever be in the same situation.

  7. I am keeping my supplemental insurance. It’s better to be ready that not. Whatever comes up, I am ready and feel safe that something will cover up. Honestly, this is not a ripped-off.

  8. One very large segment of workers should never pass up buying two polices, but Aflac corporate does not want this publicized – lest they sell too many money losing policies.

    Working women planning to have children should purchase short term disability and hospital indemnity. Both cover normal childbirth scenarios, which many families plan to have happen. When else can you purchase insurance to cover a highly likely scenario?

  9. It’s best to take supplemental health insurance, period. Better safe than sorry. With the cost of health care in our country, we’d easily go bankrupt if we don’t have proper insurance.

  10. We have Cancer policy and accident policy, I have had a major accident. I have been going rounds and rounds with aflac paying. They pay the very minimum, and I have to appeal, they send another small check, “minor surgery” and I have to appeal. They give me the run around constantly. I have had a hip dislocation, they have not paid, and will not give reason. I have had arthroscopic surgery, and they have not paid, with no explanation. I have had several repairs. I’m disgusted, and stressed, still off work recovering, as far as I’m concerned they are horrible. I pay they every month. They are horrible to their customers ;0 (

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