Your Essential Guide to Supplemental Insurance Plans

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.


We’ve got your back! Student Loan Hero is a completely free website 100% focused on helping student loan borrowers get the answers they need. Read more

How do we make money? It’s actually pretty simple. If you choose to check out and become a customer of any of the loan providers featured on our site, we get compensated for sending you their way. This helps pay for our amazing staff of writers (many of which are paying back student loans of their own!).

Bottom line: We’re here for you. So please learn all you can, email us with any questions, and feel free to visit or not visit any of the loan providers on our site. Read less

We’ve all seen the Aflac duck commercials squawking away about how having supplemental insurance was a lifesaver after an accident. But, is it something you need?

“The cost of many health insurance policies are getting out of reach for many consumers and families,” says John Barnes, a certified financial planner with My Family Life Insurance. “Deductibles are increasing at a rapid rate, so people are wondering where supplemental insurance policies come into play.”

In fact, in 2015, average annual premiums for employer-sponsored health insurance rose 4 percent over the 2014 average premiums, with wages only increasing 1.9 percent.

These insurance policies are often marketed direct-to-consumer, so it can be difficult to get the unbiased opinion you’re looking for. Not to mention, there are many different types of supplemental insurance — there’s not a one-size-fits-all plan.

Here, insurance experts give you everything you need to know about supplemental insurance plans.

What is supplemental insurance?

Supplemental insurance, also known as gap or voluntary insurance, is insurance purchased to supplement medical coverage.

“As medical costs continue to rise and high deductible health plans grow in popularity, supplemental insurance can help with added expenses, like deductibles, co-pays, and even day-to-day expenses,” says Jocelyn Grega, assistant vice president of consumer marketing at Unum, a supplemental insurance provider. “Supplemental coverage is another layer of financial protection.”

It’s important to note there’s not just one type of supplemental insurance plan. Instead, many different types cover a range of health-related concerns from emergencies to long-term health issues. Here are the top five.

1. Dental and vision

“Medical plans often lack comprehensive dental and vision benefits, and supplemental dental and vision coverage can help with the costs of preventative measures, routine maintenance, and even surgery,” says Grega. These supplemental health insurance plans can make for more complete coverage for your general health.

According to Barnes, dental and vision usually don’t deny coverage. To prevent adverse selection, dental and vision carriers typically have a waiting period before any major procedure. The waiting period could be six, nine, 12, or 18 months.

Who is this best for?

If your primary insurance policy is lacking in dental and vision coverage, then you might want to consider a supplemental plan especially if you regularly use those doctors. It also helps in the case of an oral or eye emergency.

2. Critical illness

If you already have critical illness coverage and are diagnosed with, for example, cancer, or if you suffer a stroke, you will be paid a lump sum of money to cover things such as a major organ transplant. You can not purchase the plan after the diagnosis.

“That lump sum of money, which ranges from $10,000 to $1 million, can be used for anything, like deductibles, groceries, mortgage payments, or travel expenses for doctors’ appointments,” says Grega.

Costs are based on your age, who you choose to cover (yourself or dependents), and selected benefit amount. Whether or not you use tobacco also affects your rates.

Who is this best for?

The threat of bankruptcy due to a major illness and cancer is real. Just because you have health insurance doesn’t mean you have complete coverage in these cases.

“If heart disease or cancer runs in the family, I generally think it is appropriate to look into a critical illness policy,” says Barnes. “If your job is high stress, a critical illness policy can be needed. If you are otherwise healthy, then maybe can hold off on this.”

3. Disability insurance

This is basically income protection,” says Grega. “Disability insurance pays you a portion of your income if you’re unable to work for a period of time.”

That period of time depends on the specific policy, but can range from until you can go back to work to the number of years stated in the policy. Some policies last until age 65.

Many factors go into determining your premiums for such coverage, including age, sex, occupation and the amount of potential lost income you are trying to protect.

The less likely you are to get hurt on the job, the lower your premiums will be. Someone with a desk job will likely pay less in premiums than a construction worker.

The percentage of your income you would receive from the policy depends on how much coverage you purchase, your lifestyle, career, age, length of payout, and waiting period.

For example, a healthy woman in her 30s with no other disability insurance in a non-laborious job could pay between $205 to around $275 a month, for a monthly payout of about $5,000 a month until she was 65.

Who is this best for?

“If you would have trouble paying bills without a regular paycheck, this is a great financial solution,” says Grega. “While many young people assume the chances of disability are slim, the Social Security Administration says that one in four 20-year-olds will have a disabling incident before they retire.”

According to Grega, the top causes of disability claims for millennials are pregnancy, cancer, injury, and joint or back disorders.

4. Personal accident insurance

Accident insurance pays a lump sum, ranging from about $5,000 to $25,000 directly to you if you get hurt in an accident, which can range from breaking your ankle while playing tennis to slipping on ice.

“You get a fixed amount based on your injury to use however you want,” says Grega. “From hospital expenses to dog walking services.”

Barnes adds, “Nearly all accident policies cover accidental death or dismemberment, too. So, if you are truly uninsurable from a life insurance perspective, you will have coverage through this policy if you die from an accident.”

The actual list of injuries will vary from policy to policy, but things like an injury resulting from sickness and disease, recklessly putting yourself in a dangerous situation, injury suffered when under the influence of drugs or alcohol, self-inflicted injury, sustaining an injury while committing a crime, and injuries sustained before purchasing the policy are not typically covered. The policies also don’t cover preexisting conditions.

Who is this best for?

“I recommend accident insurance if you have a higher chance of getting injured either on the job or doing a personal activity like a sport,” says Barnes. “The best policies cover both on and off the job. They also cover family members and children.”

It can also help with your costs, even if workers compensation covers you. Barnes recommends that nearly all self-employed individuals who work laborious jobs should have this policy as they don’t have access to workers compensation.

Many policies will also cover sports injuries, according to Barnes. If your son or daughter actively play sports and gets hurt, you can receive payment for that sports accident.

5. Life insurance

If you have student loans, mortgages, and auto loans, life insurance can cover those debts.

“If something were to happen to you,” says Grega. “This coverage can also help your family cover final expenses, like funeral arrangements, which often range from $7,000 to $10,000.”

There are two major types of life insurance: term and whole life. Term pays only if death occurs during the term of the policy, which is usually from one to 30 years while whole will cover whenever you die.

The average premium costs will differ based on multiple factors, including age, occupation, and if you’re a smoker. It also ranges in the amount of coverage, which could be $250,000, $1 million, or more.

Life insurance can deny coverage based on health, lifestyle, occupation, and driving history. If you are a skydiving instructor, you probably won’t qualify for individual coverage. If you use drugs, same. If you are on probation, probably no coverage.

“Coverage can be obtained once the high-risk lifestyle or occupation no longer exists or the carrier believes you are no longer a risk,” says Barnes. “If the skydiver now works in an office and no longer skydives, probably could get coverage. If the person who uses drugs is now clean and has been for over 5 years, probably could. Driving history plays a role because if the carrier sees that you are a reckless driver, you won’t get coverage.”

It’s also important to make clear that not all student loan debt becomes your surviving family’s responsibility. Federal student loans, including Parent PLUS, are discharged when the borrower dies.

Some private student loan lenders do offer a death discharge, but some might come for your estate when you die. Typically, if the loans are only in your name, your children or other relatives aren’t generally considered liable.

Who is this best for?

“You might not need coverage if you’re young, living independently and don’t have debt,” says Grega. “However, if you have certain debts, like credit card, you’ll want life insurance so the financial burden isn’t passed on to your family.”

In general, big life stages can trigger the need for it — buying a house, getting married, having kids or sending kids to college — since you’ll have more money at risk in case you die suddenly.

Why would you need supplemental insurance?

You need supplemental insurance if you or your spouse would have trouble affording out-of-pocket medical expenses, like copays or deductibles, which is often the case for those without substantial savings, like recent college graduates or young professionals.

There are certain lifestyle and health history factors in mind too. “If you have a laborious job, active family, or are self-employed in a laborious job (say a plumber or construction), or have a history of heart disease or cancer runs in your family, you may want to consider a policy,” says Barnes.

“Also, if you have a high deductible health insurance policy and you feel you are paying way too much or paying too much out of pocket, these supplemental insurance policies can pay some, or all, of your cost back.”

The benefits of having supplemental insurance are you’ll have more coverage in case something unexpected happens so you don’t have to dip into your savings as much. But, the downside is you could be paying an extra monthly cost for something you’ll never use. “You need to balance the premium cost and coverage,” says Barnes.

What will it cost?

“Supplemental insurance, depending on the type, is usually not that expensive,” says Barnes. “But, you need to balance the premium cost and coverage. I try to avoid having a consumer or family pay a high premium for a small benefit or risk.”

Another cost consideration is where you buy the plan. “It’s usually more affordable to purchase supplemental insurance through the workplace than to buy on your own outside of work,” says Grega. “Costs for critical illness, life and disability insurance are usually about $25 per month, but prices can vary depending on the plan.”

A supplemental health insurance plan is your call

Ultimately, it’s a personal decision whether you need supplemental insurance or not. Having an understanding of who needs it based on the expert information can help make that decision a bit easier.

Ask yourself if you fall into one of the categories above and if you do, start to research different insurance plans in that specific category. This will help you narrow down what you’re researching and let you compare the cost and benefit of each.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderVariable APREligible Degrees 
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit, email us at, or call 888-601-2801 for more information on ourstudent loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes.

3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.899% APR to 8.179% APR (with AutoPay). Variable rates from 2.570% APR to 6.980% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. SoFi rate ranges are current as of September 14, 2018 and are subject to change without notice. See APR examples and terms. Lowest variable rate of 2.570% APR assumes the current index rate derived from the 1-month LIBOR of 2.08% plus 0.740% margin minus 0.25% AutoPay discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.
  2. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (

4 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.

5 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.57%-8.17% (2.57%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.75%-8.69% (3.75%-8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit We also have several resources available to help the borrower make a decision at, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Estimated average savings amount is based on 14,659 Education Refinance Loan customers who saved on loans between August 1, 2017 and July 31, 2018. The calculation is derived by averaging monthly savings across Education Refinance Loan customers whose payment amounts decreased after refinancing, calculated by taking the monthly payment prior to refinancing minus the monthly payment after refinancing. We excluded monthly savings from customers that exceeded $4,375 and were lower than $20 to minimize risk of data error skewing the savings amounts. Savings will vary based on interest rates, balances and remaining repayment term of loans to be refinanced. Borrower’s overall repayment amount may be higher than the loans they are refinancing even if monthly payments are lower.

2.57% – 6.98%3Undergrad
& Graduate
Visit SoFi
2.47% – 5.87%1Undergrad
& Graduate
Visit Earnest
2.47% – 8.03%4Undergrad
& Graduate
Visit Lendkey
2.80% – 6.22%2Undergrad
& Graduate
Visit Laurel Road
2.48% – 6.25%5Undergrad
& Graduate
Visit CommonBond
2.57% – 8.17%6Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.