Is Supplemental Insurance Necessary?

Our former employer offers supplemental insurance to employees including:
Accident Insurance
Cancer Care
Critical Care and Recovery Insurance
Hospital Intensive Care Insurance
Hospital Confinement Indemnity Insurance
Critical Illness Insurance

I never bought any of these policies.  Cancer insurance probably has the worst reputation.  Consumer Reports lists dread-disease policies as insurance you don’t need.  The problem is that they:
don’t cover outpatient treatment
usually have fixed dollar or time limits
they don’t cover related illnesses like infection or pneumonia

Clark Howard calls accident policies a rip-off.  Life, disability, and health insurance give you broader coverage.

If you are considering supplemental insurance, calculate what you pay a year in premium and compare that to the fixed dollar limits of the policy.  You might find it to be surprising how much premium you are paying for very little coverage.

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