What is Hospital Indemnity Insurance?
The purpose of hospital indemnity insurance (or hospital confinement insurance) is to pay a claim if you are hospitalized as well as the costs of medical services after copays, coinsurance, and deductions.
Every hospital indemnity plan is different; some benefit categories may include a fixed benefit for admission, a fixed benefit for an overnight stay, and a fixed benefit for each additional overnight stay. Some hospital indemnity insurance policies may also include other types of benefits, such as coverage for treatment in an emergency room and coverage for certain outpatient procedures. In some hospital indemnity insurance policies, certain diseases or accidents are covered, but generally specialized insurance policies (cancer, critical illness, accident, etc.) offer larger benefits.
Hospital indemnity insurance supplements medical insurance not replaces it, so it‘s important to know what it won‘t pay for as well as what it will. It won‘t pay medical bills from your doctors or hospitals, nor will it pay for medication from a pharmacy. Benefit payments you receive from a hospital indemnity policy are meant to help you cover the deductibles and coinsurance you do not receive from your medical insurance. That said, the benefits from a hospital indemnity policy may also be used for other expenses you may have because you’re not working.