Types of Insurance

With so many different types of insurance, it can be overwhelming to know which is most important. Knowing the difference between types of coverage can help protect your finances and give you added peace of mind. You might even look into supplemental insurance, like plans offered by Aflac that can help cover gaps due to unexpected expenses. Understanding the different types of insurance can help you make a financial plan for whatever comes your way.

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Table of Contents

Key Takeaways

Understanding the different types of insurance — including health, life, and supplemental insurance — can help protect your family during unexpected medical and financial events.
Major coverage options, such as dental, disability, accident, critical illness, and cancer insurance, address specific financial expenses.
Choosing the right insurance coverage depends on your life stage, financial goals, and risk tolerance and may include adding supplemental insurance to help cover gaps.

How insurance works and why it matters

Simply put, insurance helps protect you and your loved ones against unexpected expenses. For example, if you slip and fall and have to go to the hospital, your medical insurance may help cover your hospital bill.

When you apply for an insurance policy, you'll choose your coverage, laying out under what circumstances you'll be paid. To keep your coverage active, you'll need to pay a monthly fee or premium.

If you have a covered incident, you'll submit a claim. The insurance company will review your information and provide payment or let you know why it was denied. Many policies may have a deductible, or a set amount you must pay out of pocket before your coverage applies.

The role of supplemental insurance

Many insurance policies can cover a wide range of procedures or incidents, but some may not cover certain procedures or may only pay a set amount for conditions like cancer or mental health treatment.

Supplemental insurance can help cover those gaps and complement your existing coverage. You can apply for Aflac's wide range of supplemental insurance policies just like primary insurance, though some policies are only available as part of your employer's benefit plans.

Major types of insurance

There's no one-size-fits-all insurance policy. Each major type of insurance has its own scope of coverage.

Health insurance

Health insurance helps you pay for medical expenses, including doctors' appointments, mental health care, and prescription drugs. You may receive health insurance through your employer, or you can purchase it through your state's health insurance marketplace during Open Enrollment.¹

Life insurance

Life insurance pays a death benefit to your loved ones if you pass away due to a covered cause of death. This can help pay for end-of-life care and provide a financial safety net for your beneficiaries. Aflac offers a wide range of life insurance products, including Whole, Term, and Final Expense Insurance.

Dental insurance

Dental insurance can help pay for treatment for your teeth and oral health. Aflac's network dental insurance for individuals and families, for example, covers both preventative and restorative procedures.

Disability insurance

If you have an injury or develop a disability that causes you to miss work, it can cause a stressful strain on your finances. Disability insurance can provide cash payments to help replace or supplement your income. Aflac's short-term and long-term disability insurance may be offered as a benefit from your employer.

Accident insurance

Nobody wants to worry about their insurance in the aftermath of an accident. Aflac's accident insurance can help cover your deductible or any gaps in your medical insurance from unexpected costs.

Critical illness insurance

In the event of a covered illness or life-changing event, critical illness insurance can help support the care you need. Aflac offers insurance that can help protect your finances and help cover medical care or other unexpected expenses.

Cancer insurance

Cancer treatment can require a wide range of specific treatments and therapies that may incur out-of-pocket costs. Aflac's cancer insurance can offer supplemental coverage and added peace of mind during a very stressful time.

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Choosing the right insurance coverage for you

So, how much insurance do you need? The answer can depend on several factors:

Age and life stage: A younger, single person may need less coverage than an older person with a family who might be more interested in life or critical illness insurance.
Financial goals: Premium costs can add up. Depending on your financial goals and needs, you may want to consider other options, like savings accounts or other investments.
Risk tolerance: Do you feel confident that you're not at risk of medical issues or accidents? Or, would you rather know you're protected if the worst happens?

No matter what kind of insurance you decide to get, it's important to read your policy details carefully to understand coverage limits, exceptions, and costs.

Questions to ask before buying insurance

As you start to research your options, keep these key considerations in mind:

"Do I have dependents?": Some policies may be more expensive if they cover multiple people.
"What are my out-of-network benefits?": While some policies allow policyholders to submit claims for providers outside of the insurance company's preferred network, others will only cover in-network services. That means you may be responsible for the full cost if you go out of network.
"What expenses aren't covered by my primary insurance?": Under the Affordable Care Act, all essential health benefits must cover a set number of medical service categories.² However, there may be services outside of those requirements that aren't covered by your plan, so always check your policy language.

Learn more about supplemental insurance from Aflac

Choosing the right insurance for you can be an important part of planning for the future. Whether you’re looking for primary coverage or adding additional policies like Aflac’s supplemental coverage, you can feel confident that you and your family are financially protected.

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