Ever Hear of Hospital Indemnity Insurance?

  1. Insurance 101: Everything You Need to Know About Different Health Plans
  2. Here’s the Skinny on Short-Term Disability Insurance.

Learn About What it is and Why You Might Want to Get Covered.

Photo by Arseny Togulev on Unsplash

Each year 530,000 families file bankruptcy due to medical bills they cannot pay, according to a study by the American Public Journal of Health (APJH). Scary! Needless to say, a hospital stay can be extremely costly, even if you have a top-notch health insurance plan.

Luckily, you can protect yourself and mitigate costly medical bills with Hospital Indemnity Insurance. A Hospital Indemnity plan can help ease the financial burden of a hospital stay whether it is planned or unexpected.

What is Hospital Indemnity Insurance?

Hospital Indemnity Insurance will pay benefits if you have a hospital stay. It is supplemental insurance, meaning it is an extra benefit you purchase to help offset costs for things that are not covered by your primary health insurance policy. Some expenses not covered by your health plan are deductibles, copays, and coinsurance. If you are unfamiliar with these terms, this article may help:

What do Hospital Indemnity plans pay for?

Plans will pay a large fixed amount for initial hospital admission and a smaller fixed amount for each day that you are confined to a hospital. Policies will also have an additional daily benefit amount if you are admitted to the ICU.

For example, a plan may have benefits of $1,000 for hospital admission, $100 for daily confinement, and $100 additional for ICU confinement. If Suzy was in a car accident and stayed in the hospital for 10 days, with three of those days in the ICU, she would receive a payout of $2,300.

$1,000 (1 x hospital admission) + $1,000 (10 x $100 daily confinement)+ $300 (3 x $100 ICU confinement) = $2,300

How does the benefit payout work?

Payments are not sent to any doctors or facilities. If you have a hospital stay, you will submit some information to the insurance carrier. Once they approve the claim, they will send payment directly to you. You can use the money as you wish.

Who is covered under a Hospital Indemnity Plan?

You can purchase a plan just for yourself or you can also cover your spouse and/or children.

Who should consider a Hospital Indemnity Plan?

Many people would benefit from Hospital Indemnity insurance. You may want to consider a plan if…

You have a health insurance plan with a high deductible. Take a look at your medical plan. Would you be able to pay the deductible amount required for an inpatient hospital visit? If that would be difficult for you, a hospital indemnity plan may be a good option for you.

You are planning to expand your family soon. A hospital indemnity plan will be beneficial if you or your spouse are planning to get pregnant in the near future. You can receive a payout for the hospital stay. Be careful here, some plans have a waiting period for pregnancy. A plan may require you to be covered under the policy for a specified amount of time before it will pay for hospital admissions related to pregnancy.

You have a chronic condition or are planning to have surgery in the near future. If you are a frequent flier with hospital stays or you have an impending surgery, you should get a hospital indemnity plan. Review the policy to see if the plan has any waiting periods or pre-existing condition clauses for your condition, so you know if there are any limitations before you sign up.

You do not have an emergency fund or Short-Term Disability insurance. Would it be difficult for you to keep up with your monthly utilities and expenses if you had an extended hospital stay? If you do not have a Short-Term Disability plan (or if you have one with a long elimination period), a hospital indemnity plan would help. You can use the payout toward your monthly expenses.

You can learn about the benefits of a Short-Term Disability plan here:

What else should you consider with Hospital Indemnity Plan?

Policies may vary. Some will have larger payout amounts than others. Some policies may have waiting periods and/or pre-existing condition clauses. You will want to do your research before you purchase a policy.

Hospitals tend to give people an uneasy feeling in general. And a pile of medical bills after a stay does not help ease any anxiety. Do yourself a favor and consider a Hosptial Indemnity plan to protect yourself in the future.