Money Rehab with Nicole Lapin - How to Decide if You Need Health Insurance Add-Ons

Episode Date: November 29, 2021

Our producers are now wondering if they need accidental death insurance… working fully remote. Are you in the same boat? Today, Nicole helps us all!

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. In case you missed it, we had our first episode on this fine open enrollment season and all

of the hullabaloo around choosing a health insurance policy. In the episode, I broke down the primary types of health insurance plans and all the jargon that surrounds them. I mentioned in that episode that I would be putting together a follow-up episode to cover some common add-ons for these policies. I'm a woman of my words, so here we go. Health insurance is important. There is no doubt about that.

I want to hit the table, but Mike would be mad at me, but I'm that emphatic about it. No matter what your risk tolerance is, you should not be skipping health insurance. Just thinking about you, my sweet, dear money rehabbers, opting out of health insurance makes me break out into hives. You don't want mama money rehab breaking out into hives, do you? But I wouldn't necessarily say the same thing about the health insurance add-ons that you may be considering. Some of these other plans are truly optional and do have more to do with your risk tolerance. Just a heads up before we dive in, this isn't a particularly sunshiny, joyous topic. By definition, insurance policies are policies that protect you when things go wrong. When we talk about these policies, we do have to talk

about what it looks like when things go wrong. I don't like it any more than you do, trust me. But thinking through worst case scenarios gives you the best chance at not letting these worst case scenarios derail all of your good hard money rehab. So let's go through four policy add-ons that you might be seeing and I'll tell you what they mean and whether or not they could be a good fit for you. Number one, accidental death and dismemberment insurance. FunZIES, also known as AD&D. This type of policy covers you, as the joyous name suggests, if you are injured or if you die because of an accident, which basically means if something happens that's unexpected and doesn't count as a, quote, that's unexpected and doesn't count as a, quote, natural cause of death. So, for example,

even though a stroke is unexpected, it's typically not something that's covered by accidental death insurance because it's considered a natural cause of death. AD&D is different from life insurance because you can get financial support under two conditions. First, if you suffer an injury, you get financial support. Or second, if you die due to an accident, your beneficiary gets financial support. Life insurance, on the other hand, only offers coverage for that second scenario and typically won't cover illness or injury. Who is this insurance best suited for? Well, AD&D insurance is helpful for people whose work would be

significantly changed if they were no longer able to use their body as they do now, like a woodworker, a musician, a veterinarian, and so on. This type of insurance is also helpful for people who use powerful equipment or are in physically precarious situations like a factory worker or an electrical engineer. Whether or not you should get AD&D insurance is really up to your risk tolerance and your particular type of work. If you work in an environment where injuries are more likely, like a kitchen for example, this may be a good fit for you. If not, this may be a fine policy for you to skip. However, again, if you're lying awake at night stressed the F out about A, D, and D and how you would support your family if, God forbid, you became injured, then consider getting the insurance

for the sake of your mental well-being. You can always re-evaluate and opt out of the policy if you change your mind down the line. Number two, short-term disability. This is a policy that replaces some of your income if you're unable to work. This policy is designed to help people in the case of injury or serious illness. However, it's also become a common insurance policy to give support to people expecting a child. Yep, to return to the theme we've covered a little bit on the show, health care around having a child is so lacking that some women have to go on disability when they have a baby. Pregnancy is not a disability, folks. I digress. Short-term disability is not to blame for America's sucky maternity policy. In fact, short-term disability has helped a lot of people this year. I've heard stories of many people who are able to use short-term disability to get financial

support while sick with COVID. If you're interested in this option, you're going to have to read the fine print especially closely. Many short-term disability policies have restrictions on coverage depending on when you're diagnosed with the illness relative to when you got the insurance policy. Number three, critical illness insurance. This policy gives you a lump sum payment if you're diagnosed with a serious covered illness after you enroll in the insurance plan, like cancer, for example. The difference between short-term disability and critical illness insurance is that with critical illness insurance, if you do need to cash out on

your policy, you get a preset sum up front, whereas short-term disability insurance is treated as income replacement for a certain number of weeks. Number four, identity theft. A benefit that may be offered by your company is identity theft protection, which typically gives you added protection against cyber attacks. These offerings tend to be pretty cheap, and after a scammer came from me, I'm pretty bullish on protecting my digital self, and I encourage you to be too. Hossa! We made it! Again, I know that was a lot of worst-case scary scenarios, so give yourself a round of applause for sticking with me through this heavy topic. Having to think about these things is one of the not-so-awesome aspects of adulting.

However, ensuring yourself against the worst-case scenario is the only way to not experience the worst of the worst. I hope you never, ever have to deal with any of these issues. But if you do, I want to make sure you're protected. For today's tip you can take straight to the bank, when you enroll in health benefits, make sure you've updated your beneficiaries. If you've had a baby since you enrolled in benefits, let's say, you'll probably want to assign them as a beneficiary. Or if you've dumped your boyfriend since you assigned your benefits, you probably don't want him to be your beneficiary anymore. If your ex isn't in your life, they shouldn't be on your life insurance policy.

Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team Michelle Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design.

And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.