When you’re hospitalized, chances are there will be expenses that you have to pay yourself, even with an existing healthcare plan. A hospital indemnity insurance plan can cover a percentage of your income while you’re out of work and in the hospital.
It provides a cash benefit paid directly to you, which can help with your out-of-pocket expenses. One form of this plan is known as hospital confinement indemnity insurance.
To learn more, find an independent agent in our network who specializes in health insurance. A local member agent can assess your family's healthcare needs and help you to compare quotes to find the best health insurance indemnity plan for you.
Facts About Hospital Indemnity Insurance
- Provides a fixed daily cash benefit while you stay in the hospital, regardless of hospital fees
- Hospitalization benefits are predetermined and are paid regardless of any other insurance the you have
- A hospital indemnity plan (HIP) is an affordable supplemental coverage plan
- There are HIP choices – from basic to robust policies
- Coverage cost depends on your age and the coverage amount you choose
- Cash benefits are tax free and paid directly to you
- Approval is guaranteed for eligible members without a physical exam requirement
- Even those with pre-existing conditions can get coverage, but it may take some time
- Indemnity policies are available directly from insurers or from insurance agents
What Do Indemnity Health Insurance Plans Cover?
In short, indemnity health insurance plans cover the expenses that you’d normally have to pay for, beyond what your health or hospitalization insurance covers. When you are hospitalized, you’ll face medical and living expenses.
Healthcare or hospitalization insurance can cover the medical expenses, but living expenses are not usually covered. Most likely, that expense will come out of your own pocket and can potentially disrupt your retirement and savings funds.
An indemnity insurance policy can help you pay for those living expenses. As soon as you’re admitted to a hospital, the policy goes into effect, providing a daily benefit that supplements your normal insurance policy. The daily benefit you receive does not take medical expenses into account.
Who Needs Health Insurance Indemnity?
Everyone who can possibly get sick can benefit from a health insurance indemnity plan. It is important to ask yourself what expenses you may need to cover, without your regular steady income, if you end up in the hospital for an extended period. You may need cash to cover expenses such as:
- Your family’s groceries and living expenses
- Your child’s daycare
- Your electric and utility bills
- Your mortgage
- Your health insurance deductible
If you have a hospital indemnity insurance plan, it can even help pay for insurance premiums and deductibles to ensure that you do not have a disruption in service. An indemnity insurance plan helps safeguard your savings accounts and supplements your out of pocket expenses.
Here is an example scenario. John is hospitalized for an extended period due to a stomach complication. His health insurance covers his medical and hospitalization expenses but only after he pays his $500 deductible.
While John has the savings to cover the deductible, that’s a large chunk of money removed from his savings account. Luckily, he also has a health insurance indemnity policy that pays a cash benefit of $100 per day.
For the 10 days John is hospitalized, he will receive a total insurance indemnity benefit of $1,000. He can use this to pay himself back for the $500 deductible. Additionally, he still has a $500 balance which he can use for other personal expenses.
How Much Medical Indemnity Insurance Do You Need?
Consider your income and expenses when determining how much medical indemnity insurance coverage you need. How much does it take for you to pay your bills, groceries and other living expenses?
The ideal coverage should be a full income replacement – the amount of money you earn while working. If you purchase the right amount of coverage, in the case where you’re not able to work, you will have a financial safety net to continue covering your daily living costs.
Getting sick and being hospitalized may lead to additional expenses that you don’t anticipate. In this case, it may be beneficial to choose a medical indemnity insurance policy that will cover more than your income level.
Talk to your independent agent to make sure you’re making a choice that’s right for your needs and those of your family.
How Much Does Hospital Indemnity Insurance Cost?
Indemnity medical insurance costs depend on your age, the amount of coverage you want and the indemnity insurance company. For people age 30 to 40, the price range might be $2 to $3 monthly.
You can buy coverage per individual or per family. For the benefit that a hospital indemnity insurance plan provides, the cost is relatively inexpensive.
Have your agent discuss the details of hospital indemnity insurance with you. Your local agent can collect quotes from multiple insurers, compare them and tailor a policy to your needs.
How to Buy Indemnity Coverage
You never know when you’ll get sick, but with an indemnity policy, you will have the confidence and peace of mind that you’re covered no matter what happens.
While your health insurance takes care of medical expenses, your hospital indemnity insurance plan will take care of your living expenses. All you need to take care of is yourself.
The best way to compare quotes on hospital indemnity coverage and get the right amount of insurance for your needs is to work with an independent agent.
While shopping for a hospital indemnity insurance plan, review your options and make sure you don’t overpay for the same amount of coverage that you could get somewhere else for a better price.
An independent agent in our network can compare quotes and coverage options from multiple insurers and help you find the right coverage for your needs.
Your local independent agent will get to know you personally, and will be able to help you navigate your options for indemnity health insurance. Find an agent right in your area today.