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What Is Hospital Indemnity Insurance?
Hospital indemnity insurance is a limited-benefit form of supplemental health insurance. Depending on the policy, it may provide specified benefits for covered events such as:
- Hospital admission
- Daily hospital confinement
- Intensive care confinement
- Certain outpatient procedures
- Ambulance transportation
- Other services specifically identified in the policy
Available benefits vary by insurer, product and state. A hospital visit or service does not automatically qualify for payment.
How Benefits Work
When a covered event occurs while the policy is in force, the policyholder or covered person may submit a claim to the insurance company. If the claim qualifies under the policy, the insurer pays the applicable fixed benefit.
Depending on the policy and any valid assignment, benefits may be paid directly to the insured person or another designated recipient. The benefit may be more or less than the actual expense incurred and is not calculated as reimbursement for the complete medical bill.
How the Benefit May Help
Hospital indemnity benefits may help with expenses such as:
- Health-plan deductibles, copayments or coinsurance
- Transportation and lodging
- Childcare or dependent care
- Groceries and household expenses
- Household expenses during time away from work
- Other needs selected by the recipient
Whether a particular expense is eligible for reimbursement is not what determines the policy benefit. Benefit eligibility and payment depend on the covered event and all terms, definitions, limitations and exclusions of the issued policy.
What to Consider Before Applying
When comparing hospital indemnity policies, consider:
- Which admissions, confinements and services are covered
- The fixed benefit provided for each covered event
- Waiting periods and effective-date requirements
- Preexisting-condition provisions
- Definitions of a hospital and eligible confinement
- Benefit limits and frequency restrictions
- Exclusions and reductions
- Available individual or family coverage
- Premiums and whether they may change
- Optional riders and their additional costs
A licensed insurance agent can explain available products and help you review how their benefits and limitations compare with your existing health coverage.
How Tristate Can Help
Tristate Financial Network works with licensed independent insurance agents who can explain available hospital indemnity products from the insurance carriers they represent.
We help clients understand covered events, benefit amounts, exclusions, limitations and costs before applying. Eligibility, approval and product availability depend on the insurer, applicant and state.