Benefits Enrollment: Critical Illness, Accident , Hospital Indemnity, etc?

[jeromedawg]

Hi all,

For those of you who have these options, do any of you buy the insurance/coverage for them and or find it useful?


Critical Illness - if you get cancer, heart attack, stroke, etc you will be covered for $10k at $7.32 per pay period or $20k at $13.82 per pay period to go towards whatever related bills. Not sure if these prices are for only myself or if they include my family too
Accident Insurance - I don't think this is limited to car accidents but any accident where benefits would be paid depending on the injury and treatment (including ER and surgery/ies). Coverage for myself + family per pay period: $11.89 for basic and $15.87 for enhanced
Hospital Indemnity - if admitted to a hospital and confined due to an accident (again, I'm assuming not only car) or sickness. Not payable for observation units, emergency room treatment or outpatient treatment. Coverage for myself + family per pay period: $14.84 for basic and $38.01 for enhanced

No idea what the difference between enhanced and basic are - the plans are through Aflac.

I didn't have any of this stuff at my last place and the only other thing I was buying extra there was Optional LTD/Buy-up and the Legal Plan. The LTD Buy-up is like $12~ here where at the last place it was only $4~ so I'm kind of on the fence with that. Legal plan is the same and that one I feel is worth it for taking care of things like grant deeds, trust updates, real estate matters, etc.

[Zamboni]

I'm kind of confused as to why you would need critical illness insurance if you already have LTD insurance. Wouldn't LTD grant you a portion of your income to pay your "bills." Also, does your family history suggest to you that you will indeed get cancer or have a heart attack or stroke some time soon? Also, do you have health insurance already? If so, is there some weird gap in your health insurane that you need specific insurance for accidents that cause injury? Are you in an accident riddled profession or something?

For example, my Dad was in a profession where losing a hand would mean losing his profession permanently, and he had kids to feed, so he had specific accident insurance in fairly large amounts that covered loss of a hand. I, on the other hand (snicker), am in a line of work where I could lose a hand and keep on keeping on at work without too much problem, and my kids are grown and can fend for themselves and even pay my way if I lose my profession at this point. These are really the type of thing you should be thinking about before aimlessly shelling out monthly for extra insurance on top of basic LTD and basic health coverage that I do recommend having.

Sorry for so many questions. Seems like you need to get more facts before you decide.

[cchrissyy]

I have a low opinion of that sort of policy. I think their business model is preying on people's fear of a specific, rare, situation for which you already have coverage.

[lhamo]

What are your deductibles and OOP max limits on your regular insurance?  How long is the waiting period before regular LTD kicks in?  Do you have the cash reserves to cover those costs?  If you do, then congratulations -- you are self-insured and do not need these extra coverages.

Supplemental stuff like this is typically for people who are living paycheck to paycheck and/or have a large debt load they need to cover.  If you have a robust stash, including emergency fund, you most likely don't need it.

Don't forget to check and see what SS disability/survivor benefits would be, too.  In our case by the time I was thinking about buying supplemental life insurance coverage (which would have been complicated/expensive as an expat), I figured we or the surviving spouse/kids would be just fine financially with the stash we had already accumulated + SS benefits.

[jeromedawg]

I'm kind of confused as to why you would need critical illness insurance if you already have LTD insurance. Wouldn't LTD grant you a portion of your income to pay your "bills." Also, does your family history suggest to you that you will indeed get cancer or have a heart attack or stroke some time soon? Also, do you have health insurance already? If so, is there some weird gap in your health insurane that you need specific insurance for accidents that cause injury? Are you in an accident riddled profession or something?

For example, my Dad was in a profession where losing a hand would mean losing his profession permanently, and he had kids to feed, so he had specific accident insurance in fairly large amounts that covered loss of a hand. I, on the other hand (snicker), am in a line of work where I could lose a hand and keep on keeping on at work without too much problem, and my kids are grown and can fend for themselves and even pay my way if I lose my profession at this point. These are really the type of thing you should be thinking about before aimlessly shelling out monthly for extra insurance on top of basic LTD and basic health coverage that I do recommend having.

Sorry for so many questions. Seems like you need to get more facts before you decide.

No need to apologize - these are questions I need to think more about as to why any of these things might be of importance. It sounds like I likely don't need it - I mean, one rule of thumb is that if I never had a need for these before why should I have a need for them now? On the other hand, I am getting older...lol

In terms of family history, we do have a history of heart attacks and strokes in the family - my grandfather had a stroke and died in his 70s. My grandmother had a stroke but survived but it screwed her up and she only had a 2-3 more years after that IIRC. My dad had an Angioplasty in his 40s and a triple bypass back in 2010. He has been ok since but has had a history of issues with cholesterol and blood pressure. I am on the high side for both as well. So, genetically, I am "at risk"

With the new job we do get health insurance - I'm planning to go the HSA route as well. And for LTD I'm considering the buy-up as well. I guess the company I'm with you *could* get injured if you're in manufacturing - it's a medical device company that designs and manufactures the machines used for radiation treatment and therapy. But the group I'm with it's all software and I WFH full time, so I'm not going into labs and testing stuff where I'm exposed to radiation, etc. Nor am I working with heavy machinery, etc.

[lifeisshort123]

I have had these plans.  And I have colleagues who swear by them.  Our employer offers:

Aflac Short Term Disability
Aflac hospital
Aflac Critical Care (Heart Attack, Stroke, etc.)
Aflac Cancer
Aflac Accident

I find the Short Term policy helpful if you don’t have a robust emergency fund. Also, depending on how your employer’s PTO policy works, I can also see some merit to this plan.  For example, if you don’t want to have to use your emergency fund to cover an unexpected time away from the office, and/or you only have 5 days off a year that don’t accrue, you might say it’s worth paying.

Aflac Hospital I find to be a very underwhelming product.  Only the old guard, who bought their policies 100 years ago (when they had different benefits), or the hyper-nervous when it comes to insurance policies and will buy anything in the Cafeteria Plan section, seem to gravitate towards this plan.  There is a way to have the coverage pay for itself if you can perfectly time baby delivery, but that is quite a gamble as they only cover pregnancy after a significant waiting period.

Aflac Critical Care is a very inexpensive policy.  It covers a large initial benefit the first time you have a stroke, heart attack, or other covered events.  I am not sure if it really makes much sense as a policy, but it is very cheap, and the initial payout is quite large, and you can buy a rider to help it build in value each year.

Aflac Cancer works similarly to critical care.  If you have a family history with cancer, this one might make sense.  But, that being said, it is a very expensive policy.  This is another product that has, apparently, gotten much worse with time, so the benefits are not as robust as they used to be.  This one also offers the “building benefit” rider, so each year the cost goes up an amount that you purchase.  Certain screenings are also covered each year, which, if you do them, can help cut into the amount of the cost.

Aflac Accident has some benefits, but for it to make financial sense, you need to be getting in quite awful accidents based on what they cover to get your money back.  I could see where some families might want this with new teenage drivers.  It offers wellness credit for your physical, so you can get paid for your physical which is nice.

Overall the best way to go is probably save your money.  These plans also have a bit of a “winning the lottery” sort of approach to them, which is quite bizarre.  In a world before Obamacare this makes sense to me, but post Obamacare, these policies make less sense to me in many ways.

[Catbert]

I have a low opinion of that sort of policy. I think their business model is preying on people's fear of a specific, rare, situation for which you already have coverage.

+1  You'd be better off taking the payments for all those narrow policies and getting a more general Short Term Disability (STD) policy if you feel the need.  If those premiums wouldn't cover a decent STD policy then that tells you something about these narrow specific policies.

[okisok]

For a brief period in my life, I sold life insurance. The Aflac guys were the shadiest, slickest salesmen I ever dealt with. I didn't stay in it long enough to see if their coverage was worth it, but they definitely gave me the willies.

I agree with Catbert that you'd be better off putting that money in savings and checking out the STD coverage. That's what I've done with my coverage. I am paying $40/month for extended STD benefits (sort of gap coverage) until I hit my employer's eligibility for LTD coverage.  That reminds me to check that I wrote it in my calendar to cancel the STD when I hit the mark.

[lifeisshort123]

I had a plan to do something similar with my employer and do have STD for that purpose.  However, lately I have decided I would rather be able to take more time off and not have to worry about accumulating the number of days.  For now, I am keeping the STD policy because it is relatively cheap.  I have had family members who were financially solvent, but had to be away from work for a long time who had STD policies.  Honestly, it was just such a relief for them to know that money would be coming in, that I think it will be worth paying for the “piece of mind”.

I know that is very not-Mustachian, but for me, it provides some comfort for now, and maybe later I will reconsider.