Definition - What does Ancillary Product mean?
An ancillary product is a product that is acquired as a bonus or add-on purchase when buying another product.
Insurance policies can be purchased as ancillary products. A vendor selling smartphones, for instance, might offer the buyer smartphone insurance coverage as an add-on purchase, even if they don't sell the insurance as a stand-alone product.
Insuranceopedia explains Ancillary Product
Insurance policies are a natural fit as an ancillary product for various purchases since they can be bundled with a variety of different goods.
Many people who buy electronics or other expensive items want added security and peace of mind by insuring it. Sellers of these products, then, may offer warranties and other insurance products that can be purchased along with the item. In these instances, the insurance policy or warranty is an ancillary product to the primary purchase.