What does "gap insurance" cover?

Gap insurance specifically addresses the financial responsibilities that arise when a primary health insurance plan may not fully cover certain expenses, particularly in instances where there are high deductibles or co-payments. This type of insurance serves to "fill the gaps" in coverage, helping policyholders manage out-of-pocket costs that could pose a financial burden.

For example, if a health insurance plan has a high deductible, gap insurance can cover some of the costs incurred until that deductible is met. This is particularly valuable for individuals who may find themselves needing multiple treatments or facing unexpected medical bills, ensuring they have coverage for expenses that would otherwise be payable entirely out-of-pocket.

The other options center on specific types of coverage that do not encompass the overall intent of gap insurance. Emergency medical expenses are typically covered directly by health insurance, while lost wages due to illness fall under disability insurance rather than gap insurance. Lastly, coverage limited to cosmetic procedures does not reflect the broader aspect of gap insurance, which is designed to address various medical costs that exceed what a primary insurance plan may offer.