Supplemental Insurance for the Self-Employed

A Rude Awakening

My mother is a retired realtor and my father, for most of his years, worked as a government employee. I don’t know what type of conversations they had about money and financial planning with one another. But I know for sure they never had conversations with me about their money or financial planning. It wasn’t until my father was battling cancer that he asked for my help with buying a life insurance policy, preparing a will, and planning for his burial. After my father passed, my mother was diagnosed with Alzheimer’s. It was a rude awakening. My parents had not adequately prepared for any of these life events and to make matters worse, neither had I.

Make the Time

The realization that my parents were not prepared forced me to think about my own lack of preparation. I was at the height of my earning potential and my parents needed a lot more of my time and attention. The attention they needed left me far less available for my business and myself. Just when I needed to buckle down, plan and execute… I was stretched and stressed. I believed that I had little or no time for myself. How could I pause all of the care I was providing for my mom to research what I needed for me and secure it? Particularly when I was holding the fear that I couldn’t afford adequate coverage. I had been purchasing very high deductible health insurance policies so that I could afford the monthly premiums. My strategy was to “not get sick.” The one thing that led me to take some steps to plan for my needs was the thought “what would happen to my mom if something happened to me?”

Strength in Numbers

In the summer of 2018, I was touring assisted living placements for my mom. The reality of trying to manage her life and finances highlighted the gaps I needed to fill for myself. I decided that regardless of how overwhelmed I was and how much there was to do, I needed to put insurance coverage for me at the top of my list. I realized that I didn’t need to figure all of my coverage needs out on my own. After all, as the saying goes “there is strength in numbers.” I joined the National Association for the Self-Employed. As I completed their survey, I identified that one of my chief reasons for joining was related to insurance benefits including affordable health insurance and practice interruption insurance. I got a call from their affiliated insurance broker that evening. I was of course “busy” and almost didn’t create the space to talk to him. When he asked when was a better time to talk, I decided that there was no time like the present. It was 9:30 pm and it was time to get my insurance on track.

Do the Best You Can

I know now that I did not make the best choice by purchasing an indemnity health insurance plan. This plan offered flexibility with seeing the providers of my choosing. However, the actual coverage was not adequate. Despite indemnity health insurance not offering the best coverage (which I did not understand at the time), I was persuaded to purchase it because I was told that if something went wrong and I needed to go to see medical professionals more frequently I could pay a fee to upgrade my plan to a full health insurance policy that would operate as a PPO. I could upgrade for a total of 3 months. They would even backdate the upgrade to when my increase in health services began. My goal was to make it to open enrollment and try to obtain insurance via the Healthcare Marketplace. In the meantime, I made the very good decision to purchase several insurance riders or supplemental insurance policies, including: a hospitalization rider, a critical illness policy, an accident policy, and a life insurance policy.

Critical Illness Policy

Thankfully, I was able to upgrade my health insurance when I needed too. The cost to upgrade was about $700 additional per month (payable upfront), but it reduced my out-of-pocket expense to a third of what it would have been without the upgrade. The hospitalization rider did exactly what it was meant to do when I needed it. It paid $800 a day for a hospital stay of more than two days. That payment didn’t come until 3-4 months later but it was still very helpful when it came. The critical illness policy provides a cash payout in the event of a major medical critical illness such as cancer, heart attack, etc… As I have a qualifying diagnosis (lung cancer), I expect that this policy will pay out as the hospitalization rider did.

Next Steps

In the meantime, I have continued to work. I can’t and don’t work as much as I once did, in part because of the illness itself but also because of the frequency of doctor’s appoints and the fatigue associated with my treatment. The critical illness payout will help with the shift in income at a time when my expenses increase. While I don’t feel comfortable recommending a specific company, I will share that the insurance that I got from the NASE affiliated insurance broker is Freedom Life Insurance. I know many others obtain supplemental insurance via AFLAC. I didn’t discuss policies such as short term disability and long term disability. However, I do think these are important policies to explore, including alternatives to those policies.

Peace of Mind

Naturally, it is most beneficial to obtain supplemental insurance even if you think you are too young and or too healthy to need it. Life is unpredictable. Despite our best plans, things happen and plans must be altered. Financial stress is always difficult. And it is far worse when you are injured, disabled or sick. Lastly, there other legal matters to put in place. Here are a list of some things for you to consider and explore based on your life and responsibilities: a professional will; a trust; a living will; and a power of attorney for a medical proxy in the event that you need one. While none of these topics are enjoyable to think about, it is absolutely beneficial when it comes to peace of mind and support for you and your loved ones.

Copyright © 2019 Ruby Blow. All rights reserved.

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