Prescription Drug Plans. This coverage is not always provided by traditional plans. Large employers are most likely to provide prescription drug benefits. In addition, some states have laws mandating prescription drug coverage in policies sold to small businesses or individuals. Some plans specify a deductible for prescriptions, for example, $50 or $75, and reimburse 80% of the costs above that amount. Other plans require a co-payment, for example, $5 for each prescription filled at a network pharmacy. Some plans require you to use a mail-order pharmacy for drugs you take on a regular basis.
Dental Benefits. Dental procedures are rarely covered by health insurance plans, but some employers offer dental coverage as a separate package. Reimbursement varies by procedure and is often lower than that of medical plans. For example, a crown may be covered at only 50%. Some dental plans now offer managed care provisions similar to PPOs. They pay a higher percentage of dental costs if you use a dentist in the plan’s network.
Vision Care. Eye examinations and corrective lenses are usually excluded from traditional health insurance but may be purchased as a separate package. Most vision benefits can be administered as traditional or network-based plans.
Disability Coverage. This is probably one of the most overlooked forms of insurance for working-age people. Disability coverage replaces a portion of your income when you can’t work because of illness or injury. Most policies pay a percentage of your paycheck, for example, 60% to 80%. (You also may receive income from Social Security for certain disabilities or from Workers Compensation if you are injured on the job.)
Common examples of disabilities include back injuries or surgical procedures. Some policies provide coverage when you cannot work in your specific field, while other policies pay benefits only if you cannot work at all. Most policies will not pay if the disability was self-inflicted, such as injuries caused by drug abuse or a suicide attempt. Most companies also will generally not pay for a preexisting condition, typically defined as an injury or illness that occurred within three months before obtaining a disability policy. Ask your insurance agent or employer for details about how a specific policy works and how it defines disability.
Most policies don’t pay any benefits during the initial waiting period, which can range from one to six months or even longer. That’s why it’s sound financial advice to keep cash savings on hand to cover at least six months of living expenses. After the waiting period, short-term disability policies generally pay for periods of disability ranging up to two years. Long-term disability policies may pay for an indefinite period, but most policies end when the disabled person turns 65. During your disability, premiums will be waived. It’s a good idea to buy enough disability insurance to cover 80% of your monthly expenditures. If your employer provides a 60% disability policy, you may want to consider a supplemental policy covering 20% of your income. You cannot buy a policy that covers 100% of your income.
Accidental Death and Dismemberment (AD&D). Most AD&D policies provide benefits for accidental death, paralysis, or loss of limb, speech, hearing or eyesight. The percentage of payment varies by company and policy. This benefit is in addition to any other life or health insurance policies you may have. Most policies will not pay if the accident or death was due to suicide, drug abuse or mental illness. AD&D is an added benefit if your employer provides it, but it may be too expensive to purchase on your own.
Specified Disease Policies. These are available only in some states. Specified or "dread" disease policies provide medical benefits if you get a specific illness such as cancer. They may pay you a specific amount of money, for example, $100 a day, for each day of hospitalization from the specified illness. These policies are often sold through the mail. Be cautious about buying them: They may duplicate coverage you already have and/or may cost more than you would ever be likely to receive in benefits.
