After years of working for someone else in executive roles, you’ve struck out on your own.
You’re on solid financial footing and have a plan for retirement and beyond.
You’ve also planned for everything else and have all the security you think you need for life’s what-ifs.
But life can throw even executives a curveball when you least expect it. An unexpected illness or injury could set you back, in extreme cases, hundreds of thousands of dollars.
That’s why it’s important to examine the gaps in your health coverage. Health insurance will cover the majority of medical bills, but you’ll still be responsible for anywhere from 10% to 40% or more of healthcare costs.1
Supplemental health insurance can help offset those costs for the consultant, executives, or small-business owner.
What’s in this article
- What’s supplemental health insurance?
- Why should you get supplemental health insurance?
- What are supplemental health insurance options for executives to consider?
- How much does supplemental health insurance cost?
- Next steps
What’s supplemental health insurance?
Supplemental health insurance is an insurance plan you can enroll in that covers anything from accidents to doctor visits. It provides added assurance should something happen.Supplemental health insurance also complements your existing health insurance plan and provides you options to cover the added costs of care that typically fall on consumers (yes, even executives have to pay deductibles, copayments, and coinsurance).
You can also use supplemental health insurance to pay for non-medical expenses too, depending on what kind of plan you sign up for. Some examples could be rent, transportation for executives to the doctor (like a car service), or even groceries.
Lastly, you can mix and match your options to meet your needs and budget.
Worried about becoming one in five Americans who get injured each year?2Sign up for accident insurance. Worried that you won’t have income coming in after getting injured? Sign up for accident disability insurance.
Have a family history of cancer? Sign up for critical illness insurance.
Concerned about how much you’ll pay out of pocket if you go to the hospital? Sign up for hospital indemnity insurance.
Why should you get supplemental health insurance?
Major medical health insurance covers most care when you get sick or hurt. But you’re always on the hook for some out-of-pocket costs whether you have major medical health insurance or Medicare. Depending on the health plan you’ve signed up for, that amount could creep into the hundreds or thousands of dollars.Imagine you’re one of more than 33 million others who are admitted to a hospital each year in the United States.3Each day you stay at the hospital costs you $3,025.4Multiply that by the average hospital stay, (about six days), and you are potentially on the hook for $18,150.5
For the self-employed entrepreneur who’s running his or her own business, those numbers can add up and hurt your overall financial security.
What are supplemental health insurance options for executives to consider?
There are many supplemental health insurance options to consider. But for executives and consultants who are self-employed and running their businesses, there are a few that would be especially helpful in providing added financial security.Accident insurance
Accident insurance gives executives a one-time, lump-sum payment when you’re hurt. In the case of an accidental death, your family would receive the money.
It covers specific kinds of injuries, such as burns, concussions, fractures, and broken bones.
How much you get varies and could be anywhere from $2,500 to $16,000, depending on what plan you enroll in and the number of years covered. Once you do receive the payment, you can spend the money however you wish.
If you’re hurt and have to go to the emergency room, you can use accident insurance to cover the cost of your deductible, which is the amount of money you have to spend before your health insurance covers the cost of any care.
Let’s say you’re exploring rehab for your injury and want to try acupuncture. But you find your health insurance doesn’t cover it. Well, you can also use the money from accident insurance to pay for treatment.
Critical illness
Critical illness insurance protects your executive finances from a future illness. It supplements your primary health insurance, which will cover most but not all of your medical costs to treat that future malady.
Critical illness insurance covers specific illnesses, which include strokes, heart attacks, and major burns.
Like accident insurance, you get a lump-sum payment, ranging from $5,000 to $40,000, depending on the kind of plan you sign up for.
You can use the money from your critical illness insurance to pay for medical and non-medical expenses. This includes but is not limited to the cost of treatment, prescription medicine, a ride to the doctor or hospital, groceries, mortgage/rent, or childcare.
Critical illness insurance could be especially helpful if you enrolled in a high-deductible health plan (HDHP). An HDHP has low monthly premiums but it exposes you to higher deductibles.
For a 2024 high-deductible health plan, deductibles can range from $1,600 to $8,050 for an individual and $3,200 to $16,100 for a family.6
Accident Disability
Accident disability insurance provides you benefit payments when you’re unable to work because of injury.
Disability insurance is important to consider when executives face an income drought. It can provide money to cover your regular expenses like rent or groceries.
Disability insurance can last up to three months with monthly benefit payments ranging from $250 to $750.
Another thing to know about accident disability insurance is that there is typically a waiting period before you receive payments. This period could be weeks or months long.
Business owners and consultants may want to consider this option if they’d like an additional income stream after a disability.
Hospital indemnity
Hospital indemnity insurance helps you pay for the cost of hospital stays and visits. Like critical illness insurance, it supplements your primary health coverage.
You can access the benefits when you’re hospitalized. Your policy also pays you directly, and you can use the money in any way you want.
So, you can spend it paying down your five-figure deductible or copayment or opt to spend it on rent or groceries.
Payment of your benefit also is based on the number of days you’re in the hospital.
Hospital indemnity insurance will pay you $250 to $500 a day for up to four days per calendar year, depending on the plan you choose.
Physician visits
Physician visit insurance helps you pay for doctor visits not covered by your health insurance. You would use it when there is a copayment or deductible to pay for a sick visit or if your health plan doesn’t cover the cost at all.
For example, health insurance plans won’t cover the cost of a sick visit to an urgent care center. That’s when you could use your physician visits insurance.
Your policy pays you directly, up to $500 twice a year, after a visit to your doctor, the emergency care, or an urgent care center.
Another thing to know about physician visits insurance is that your existing health plan must pay the maximum amount for whatever treatment you’re receiving first before you receive any payments.
Physician wellness care
Physician wellness care insurance helps you pay for the cost of preventive care not covered by your health insurance. This includes testing and exams.
You would use it when you want to get tested for something but your health plan won’t pay for it.
For example, if you want to get a colonoscopy but you’re not considered a high-risk candidate for colon cancer, your insurance may not cover the procedure. You could use physician wellness care insurance to help offset the colonoscopy cost.
Other exams physician wellness care insurance helps you pay for that aren’t necessarily covered by your health insurance include biopsies, certain blood tests, breast ultrasounds, mammograms, and echocardiograms.
Your policy pays you from $100 to $300 once a year, depending on the plan you choose.
How much does supplemental health insurance cost?
Supplemental health insurance is typically cheaper than major medical health insurance. But that’s to be expected as well as it doesn’t cover nearly as much.Costs vary, depending on several factors like your gender, age, medical history, and where you live.
Next steps
As executives, you’re busy running your business every day. You have clients to speak to and customers to help. You don’t have time to get sick, but what happens if you do?Medical costs can snowball, leading to debt and bankruptcy. Out-of-pocket costs for care aren’t going away.
So spend some time examining your existing health insurance plan. Look at the explanation of benefits and get to know what out-of-pocket costs you’d face if you or your family fell ill.
Then consider how much added assurance you’d like. That’s where supplemental health insurance can help.
