Many people get health insurance through their employers; in fact, a study in 2019 indicated almost half (49 percent) of Americans depend on their place of employment for health insurance. 1 Whether your health insurance is through your (or your spouse’s) work or you purchase it privately, this coverage provides important financial protection in case you have a serious accident or sickness. People who don’t have health insurance are vulnerable to falling deeply in to debt or even bankruptcy due to the high cost of health care.
People often underestimate how much medical care can cost. For example, the national average for a hospital stay is 4.5 days, at an average cost of $10,400 per day — that’s a total of $46,800. 2 Health insurance coverage can help protect you from high, unexpected costs like this. Most health insurance will cover a hospital stay to a certain extent, but even the best health insurance coverage will have limits. You may still find yourself responsible for costs your insurance doesn’t cover, particularly in the event of a long hospital stay or one requiring specialized treatment.
The number of people living paycheck to paycheck is estimated at 50-74%, and almost three in 10 adults say they have no emergency savings at all. One in four families making $150,000 or more a year report they depend on their next paycheck to keep their heads above water. 3
What would you do if you suddenly found yourself facing a massive hospital bill? Before that happens, you might consider looking into hospital indemnity insurance.
Hospital indemnity insurance (also known as hospital confinement insurance or simply hospital insurance) is supplemental medical insurance coverage that pays benefits if you are hospitalized. 4 While health insurance pays for medical services after copays, co-insurance, and deductibles are met, hospital indemnity insurance pays you if you are hospitalized, regardless of any other coverage you may have.
There is no one-size-fits-all; every hospital indemnity plan is different. Common examples of the type of benefits these plans may offer are a fixed benefit for admission to the hospital, a fixed benefit for an overnight stay, and a fixed benefit for each overnight stay in an intensive care unit. 5 Hospital indemnity insurance policies may include other types of benefits as well. Among those are a benefit for treatment in an emergency room, and a benefit paid for certain outpatient procedures. Some hospital indemnity insurance policies may even pay a benefit for certain specified diseases or accidents, but normally people purchase separate indemnity policies (cancer, critical illness, or accident, etc.) as specialized policies offer more robust benefit amounts. 5
Some hospital indemnity insurance policies may allow you to add family members to your policy. If you think you might want to add family members, check the terms of the policy up front to make sure you have this ability, and determine what eligibility requirements exist, waiting periods, etc. 6
so it’s as important to understand what it won’t cover as what it will. It won’t pay medical bills from your doctors or hospitals, nor will it pay for your medications from the pharmacy. You may choose to use the benefit payments you receive from a hospital indemnity policy to pay for these expenses, but the benefit payments are meant to help you fill gaps for things not paid by your medical insurance, such as deductibles and coinsurances. That said, the benefits from a hospital indemnity policy may also be used for other expenses you may have because you’re not working.
Things to consider:
Knowing that your loved ones will be cared for when you are no longer here can contribute to your wellbeing now. Life insurance will never be cheaper than it is right now. Carpe diem! A licensed insurance agent can help you navigate your choices and build a plan according to your needs and budget.
When considering whether or not to purchase any insurance policy, it’s important to do your homework. Understand the benefits and limitations. Weigh the potential benefits with the cost and examine the various policies available. A licensed insurance professional can help you decide if a hospital indemnity policy is right for you.
Categories: Hospital Indemnity, Insurance, Supplement Health Insurance
