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Aflac’s ubiquitous duck mascot is fun to imitate. But what insurance does Aflac sell, and do you really need it?
In this article, I’ll explain supplemental insurance and look at Aflac’s products.
Company Name | Aflac |
---|---|
Company Type | Supplemental insurance |
Key Features | Variety of supplemental insurance products related to life, health and disability |
Downsides | Products may be unneccessary; high rate of customer complaints |
Best For | Those who already have good health, life and disability insurance |
If you’re a football fan, you probably know Aflac from its trivia questions during TV broadcasts or from the Nick Saban commercials. Or you’ve seen commercials featuring the quacking Aflac duck. You probably even know Aflac is an insurance company.
But what type of insurance company?
Founded in 1955 in Columbus, Georgia, the American Family Assurance Company of Columbus, Aflac for short, is the best-known provider of supplemental insurance — especially payroll deduction insurance through employers. Aflac has an A+ rating from A.M. Best, a credit rating agency for the insurance industry.
Aflac also sells some of its supplemental insurance products directly to individuals.
So Aflac revolves around supplemental insurance. What is that, exactly?
Supplemental insurance is designed to work alongside your primary insurance coverage to fill in gaps. For example, if you get injured or sick, your health insurance policy might not cover everything, or you may not get paid if you’re not working.
Some kinds of supplemental insurance offer very specific coverage: If you’re diagnosed with cancer, cancer insurance would pay you a cash benefit.
But there’s a wider range of payout options. If you suffer a stroke, maybe you want an up-front lump sum or maybe you want smaller payments as you go through therapy.
Money expert Clark Howard says supplemental insurance is not a scam, but he thinks that getting good health, life and disability insurance is a much bigger priority.
There are competitors in the supplemental insurance market, but Aflac is the leader.
Insurance Type | Available Through Employer | Available for Direct Purchase |
---|---|---|
Accident | ? | ? |
Cancer | ? | ? |
Critical Illness | ? | ? |
Dental | ? | ? |
Hospital Indemnity | ? | |
Life | ? | ? |
Short-Term Disability | ? | |
Vision | ? |
The majority of Aflac’s business runs through employers. You pay for an Aflac insurance policy via a payroll deduction. In other words, the money comes out of your paycheck much like payroll taxes.
However, you can buy some types of policies directly through Aflac.
Pulling from the Aflac website, the company says it “pays cash benefits to help pay for things that major medical [insurance] may not cover.”
The website features a cost calculator designed to illustrate expenses you may face, even if you have health insurance, if you suffer certain medical conditions or injuries.
Aflac’s biggest selling point is that it will provide you a cash payout if those specific things occur.
Keep in mind that you cannot buy insurance from Aflac that will cover expenses resulting from all illnesses or injuries.
Even the screenshot of Aflac’s cost calculator shows some of the payout for a broken leg coming from accident and hospital insurance (which you’d have to pay for separately), and the calculator indicates that the Aflac payout would not cover your entire out-of-pocket expense.
Here are some of Aflac’s positives:
Here are some of Aflac’s negatives:
There’s nothing inherently wrong with buying Aflac insurance or buying supplemental life insurance in general.
Just remember that it should be a very low priority. You should make sure that you’ve got appropriate health, life and disability insurance before even considering supplemental insurance.
It’s also crucial that you understand what you’re purchasing if you elect to purchase supplemental insurance. For example, critical illness insurance may cover only two or three specific illnesses.
This post was last modified on June 2, 2022 1:21 pm
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