Do I Need Hospital Indemnity Insurance?

Susie Valentine
Nov 10, 2020

Reclaim your health with us!  This article helps you understand Hospital Indemnity Insurance, and covers:

  • What is hospital indemnity insurance?
  • What does hospital indemnity insurance cover?
  • How do you purchase hospital indemnity insurance?
  • How much hospital indemnity insurance do you need?
  • How much does hospital indemnity insurance cost?

The rising costs of healthcare are a daily source of stress for most of us.  Even those of us with insurance worry about what might happen if we have an accident or need to have unexpected surgery for another reason.   Let’s say you fall off your bike, break your wrist, and have to go to the emergency room, but you’re still in your health coverage’s deductible stage.  This could make for a huge bill that you didn’t plan for in your medical budget.  Thankfully, there is supplemental coverage called hospital indemnity insurance that helps pay for medical costs like these. 

Hospital indemnity insurance is purchased for hospital stays, either planned or unplanned, and is typically a supplement to your already existing health coverage, especially if you have a high deductible.  This type of insurance also covers doctor’s visits, outpatient surgeries, elective procedures, rehabilitation, radiology and lab work due to the hospital stay, ambulance costs, and even prescription drugs.  While it’s often purchased as an additive to coverage you already have, it can also serve as a standalone option if you don’t have access to health insurance through an employer or your state’s Healthcare Marketplace.  

You can purchase indemnity insurance through private providers like Colonial, MetLife or Blue Cross Blue Shield, just to name a few.  The cost will depend on your age and current health, as well as what level of coverage you’d like to have.  In order to determine the cost, you’ll have to go through the underwriting process, which means that you’ll have to fill out a health questionnaire and potentially have a phone call with the insurance carrier so they can get a better sense of your background and health status.  If you have certain pre-existing conditions such as cancer or if you’ve had a stroke, it’s likely that you’ll be declined as an applicant for hospital indemnity insurance.  However, if you develop these conditions after already enrolling, you will be covered under that policy. 

Remember that indemnity insurance is purchased “just in case” something happens and you may not actually end up ever using it, so it’s wise to be more conservative with your coverage and not over-purchase.  Be sure, as always, to take into account your income and your already existing medical budget, if you have one (which we strongly recommend you do!). 

Some hospital indemnity plans will help cover your bills by way of a hospital stay payout.  For  example, if you’re in the hospital for 10 days, the plan you purchased may pay $100 a day to help with your resulting medical bills.  You can also use this money to pay more everyday bills you incur while you’re out of work or your deductible/co-pay of your main insurance plan.

*It is worth noting that if you end up staying in the hospital for a certain number of days (usually 30), most plans will waive your premium for that month. 

If you have health insurance, the idea of adding another monthly healthcare cost to your already costly premium may seem overwhelming. Still, the peace of mind that hospital indemnity insurance provides is priceless, especially if your regular plan has a high deductible. And while it is not medical insurance, it can be a more cost-effective option if you don’t have access to a regular plan and want to make sure you’re still covered in the event that something unexpected happens.