Stupid Ways to Spend Your Money #7 - AFLAC

Stupid Ways to Spend Your Money #7

Supplemental insurance policies such as AFLAC

..Some products, services, and investments that are highly advertised (even here on gather.com) are simply bad and expensive products, things with many fine prints, and some are simply run as scams and fraudulent schemes. I will bring out main points, and describe the remedy to get rid or out of them.

AFLAC Insurance (American Family Life Assurance Company of Columbus) sells supplemental insurance policies.  AFLAC Insurance offers insurance services such as: Accident Indemnity, Disability Income Protection, Cancer Indemnity, Hospital Protection, Life Insurance, Dental, Long-Term Care. 

AFLAC also has services offered for certain specific illnesses or procedures, such as strokes, organ transplants, heart attacks, etc. The company will disburse a lump sum payment to policyholders in case of these and other health events.

Pro’s for AFLAC

• Unlike other insurance providers, AFLAC Insurance pays you directly. At your request, AFLAC will send the money directly to your medical provider. Otherwise, AFLAC sends the money directly to a policyholder.
• AFLAC is portable and offers many services. Most people obtain their AFLAC coverage through their employer, but if you change jobs, you don't forfeit your AFLAC coverage. It is your policy, and it stays with you as long as you continue to pay the premiums, which do not increase just because you are now separate from your employer.
• AFLAC claim forms are simple to complete and are available directly through the company web site. If you obtain an AFLAC product through your place of employment, the premiums will be calculated and taken directly from your paycheck.
• AFLAC Insurance has an online presence. However AFLAC Insurance doesn't sell its products online, because there are agents taking commissions.

Con’s for AFLAC

• The costs of AFLAC Insurance are generally higher than those of other, similar providers.
• You have to pay for most services and then get reimbursed.  Coming up with the cash beforehand can be very difficult.
• You have to pay extra for the supplement. The rates vary and depend on your financial situation as to whether it is cost effective for you.
• AFLAC services are inconsistent.
• Strokes, organ transplants, heart attacks are very rare, and all medical insurance policies cover most of these catastrophic events.

AFLAC Short Term Disability

Pro's for AFLAC Short Term Disability:

• AFLAC short term disability insurance policies provide their customers many benefits.
• The policyholder can choose a premium according to his actual financial situation.
• AFLAC pays their customers a cash benefit when they are unable to work.
• Even if you want to change or leave your work, you can still enjoy the short term disability insurance policy.

Cons for AFLAC Short Term Disability:

• The phone calls are not easy to get through.
• Typographical errors can exist on the insurance documents.
• If you decide to get a medical treatment in foreign countries, you cannot get a payment from  AFLAC. The  AFLAC short term disability policy is only available to the disability which is being treated within the United States.
• Any disability caused by the result of any viral, micro-organism infection or bacterial will not enjoy the short term disability benefits.
• AFLAC will not pay benefits for whenever coverage is in violation of any U.S trade or economic transactions.
• If your disability is caused by re-injury or a pre-existing condition, you will not get the payment unless it begins more than one year after the Effective Date of coverage.
• During the war time, any disability caused by the war or any act of war, AFLAC will not pay you the benefits.

Remedy: If you have a good medical insurance, term-life insurance, and disability insurance, you don’t really need supplemental insurance.  AFLAC is often sold as a gap insurance when you experience catastrophic events like cancer, disability or death.  AFLAC’s premiums are generally higher than competitors' rates by a significant margin, so if you never use them, you are wasting money.  Obtain good term-life insurance outside of group plan, and look for a good long-term care plan when you reach 60.  AFLAC is generally not a good value.

Save up emergency fund, and use debit card.  Save up and pay cash for purchases.  If you don't have the money, you can't afford it.  Most of all, spend less than you earn.

Next post will discuss Whole Life Insurance

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