What is hospital indemnity insurance? Definition, benefits & who might need it.
What is hospital indemnity insurance?
A hospital indemnity plan, also called hospital indemnity or simply hospital insurance, is a type of supplemental health insurance that pays benefits when a person is admitted to the hospital. Unlike regular health insurance, the money is paid directly to you, not to the hospital. You can use it for any expenses: medical bills, everyday living expenses, childcare, transportation, or whatever your family needs most.
An illness or injury that requires a hospital stay could happen to anyone at any time. However, there are certain circumstances that could make someone more likely to experience hospitalization or high medical bills, and a hospital indemnity plan helps bridge that gap. Check out the benefits of purchasing hospital indemnity insurance, and consider if it’s right for you!
1. Hospital Indemnity can help someone with risk factors
If you have a family history of cancer, heart disease, or other serious conditions, the likelihood of a future hospitalization may be higher than average. A quality hospital insurance plan can help these individuals safeguard their savings from the financial impact of a diagnosis so they can focus more on their health.
2. It can help someone who may have a need for a surgery or procedure in the future.
If someone knows they will need a surgery or procedure in the future that requires hospital admittance, they can plan ahead for their out-of-pocket costs by purchasing hospital indemnity insurance. Hospital indemnity policies have waiting periods before coverage kicks in, and waiting periods are longer, typically at least 12 months, when it comes to preexisting conditions, so it’s important to find a policy that works with the treatment timeline.
3. Hospital Indemnity insurance can help someone during a future pregnancy
Some hospital indemnity insurance policies provide coverage for hospitalization due to normal pregnancy or childbirth after a waiting period, typically at least 10 months. If someone hopes to be pregnant in the future, they can plan ahead for their deductibles, copays, and coinsurance by purchasing the right policy. This can help new moms focus less on medical bills and more on rest, recovery, and their new baby.
4. It can help someone who has high-deductible health insurance
A high-deductible health plan (HDHP) has a sizable deductible of at least $1,600 for individuals and $3,400 for families in 2026. These are the amounts policyholders have to pay out of pocket before their policy begins to pay. That means a single hospital stay could quickly eat through your entire deductible. A hospital indemnity plan pays out regardless of what your primary insurance covers, making it a natural complement for anyone carrying an HDHP.
5. Hospital Indemnity plans can help anyone who wants to protect their family
Everyone hopes that serious illness and injury never affect their family, but it’s still important to be prepared. A hospital indemnity plan is one of the more affordable ways to make sure an unexpected stay doesn’t derail your family’s finances. It can help families to fill in the gaps left by their major medical insurance and have peace of mind knowing they’re protected.
Want more? Check out our blogs, Top 4 reasons to get hospital indemnity insurance and Q&A: Is hospital insurance right for you?
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IMPORTANT: This is a fixed indemnity policy, NOT health insurance
This fixed indemnity policy may pay you a limited dollar amount if you’re sick or hospitalized.
You’re still responsible for paying the cost of your care.
• The payment you get isn’t based on the size of your medical bill.
• There might be a limit on how much this policy will pay each year.
• This policy isn’t a substitute for comprehensive health insurance.
• Since this policy isn’t health insurance, it doesn’t have to include most Federal consumer protections that apply to health insurance.
Looking for comprehensive health insurance?
• Visit HealthCare.gov or call 1-800-318-2596 (TTY: 1-855-889-4325) to find health coverage options.
• To find out if you can get health insurance through your job, or a family member’s job, contact the employer.
Questions about this policy?
- For questions or complaints about this policy, contact your State Department of Insurance. Find their number on the National Association of Insurance Commissioners’ website (naic.org) under “Insurance Departments.”
- If you have this policy through your job, or a family member’s job, contact the employer.