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Hospital Indemnity Insurance

By June 16, 2022Insurance

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Nobody ever has the intention of being admitted to the hospital, but anything can happen, a serious accident or critical illness can cause some to have an unexpected hospital stay. Would you agree that a hospital admission could cause unexpected expenses? Think about it, a person that has a hospital stay could have other expenses that got them admitted to the hospital such as an ambulance ride and emergency room visit.

If a person doesn’t have the money to pay for these expenses think about the financial strain that would put on their family members. Since every situation is different the cost varies among persons out of pocket expenses. Hospital visits can completely wipe out emergency funds. However, a hospital indemnity plan can be an affordable solution for some that want to be protected from extra expenses that can be incurred at the hospital.

How does Hospital Indemnity Insurance work?

Hospital indemnity plans are insurance policies that help protect policyholders from high hospital costs. They do not serve as health insurance coverage or any type of medical coverage. These plans typically have a fixed daily or weekly benefit amount that is paid to the policyholder for each day they are hospitalized. This benefit amount can be used to help cover hospital expenses such as inpatient copays, deductibles, and other out-of-pocket costs.

A hospital indemnity insurance policy can be purchased as a stand-alone policy to go along with a Medicare Advantage plan. For those who are enrolled in Medicare, hospital indemnity plans can help supplement their existing coverage. These plans can be especially helpful for those who have high health insurance deductibles or copays, or who have extended hospital stays. If you are considering a hospital indemnity insurance plan, it is important to compare different plans and benefits to find the best coverage for your needs. It is important to note, that hospital indemnity insurance will not replace your existing health insurance plan.

How much does Hospital Indemnity Insurance Cost?

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Hospital indemnity insurance policies typically have monthly premiums. The cost of the premium will vary depending on factors such as the benefit amount, the policyholder’s age, and any riders added to the plan. If a person does add riders it will usually increase the monthly premium amount. For example, if someone has a hospital indemnity policy that covers only hospital confinement, they may pay $25 for their monthly premium, but if they decide to add two more riders they may pay $35 for their monthly premium.

What Type of Riders Can Be Added?

A hospital indemnity insurance policy does allow you to add riders to help pay for other medical bills. A hospital indemnity policy can do more than just help a person cover medical bills, it can help with other coverage. Riders can add more value to your coverage. An individual can add riders that cover medical expenses and nonmedical expenses such as ambulance, outpatient therapy, skilled nursing facilities, cancer, critical accident, outpatient procedures, dental, and vision. Hospital indemnity coverage can provide cash benefits to cover extra expenses. Again, think of it as a supplemental insurance plan to help with medical coverage gaps in a health insurance plan.

What should be considered when buying Hospital Indemnity Insurance?

When it comes to any decision about insurance coverage it’s wise to take many factors into account. Always make sure it’s hospital indemnity insurance worth buying based on your circumstances. As was stated earlier, there can be a lot of factors surrounding hospital stays. Keep in mind that a hospital indemnity plan acts as supplemental coverage to medical insurance. For example, medical insurance such as Medicare Advantage plans will have varying hospital copays across different carriers. A good rule of thumb would be to look at your inpatient hospital copay per day in your summary of benefits to determine a practical benefit amount. With that being said, those who have Medicare supplement insurance would not need hospital indemnity coverage because their medical insurance covers them in the hospital for a higher monthly premium.

Is it available in My State?

Product availability varies by each insurance company that offers hospital indemnity coverage. A licensed insurance agent such as myself can help in locating an insurance company that provides a hospital indemnity insurance plan in your state.

Eligibility requirements

Certain health questions will be asked. For a hospital indemnity plan, health questions are used to determine if an applicant is eligible for coverage. However in some cases, if someone falls within a certain age they can qualify for guaranteed issue hospital indemnity insurance with no medical questions asked.

How does it pay out benefits?

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A hospital indemnity plan pays cash benefits directly to the policyholder, not to the hospital. Remember, this means that the policyholder can use the money for any hospital-related expenses, such as inpatient copays, deductibles, and other out-of-pocket costs. To receive the benefit payment, the hospital indemnity insurance pays when a claim is filed.

To File a Claim

To file a claim, most hospital indemnity policies will require a completed claim form. The claim form can be obtained from the insurance company or the hospital’s billing office. Once the claim form is complete, it should be sent to the hospital indemnity insurance company along with any required documentation, such as hospital bills. The insurance company will then review the claim and determine if benefits are payable.

Real-Life example

I enrolled a client of mine into a Medicare Advantage plan a few years ago. The plan that was selected had an inpatient hospital copay of $295 per day for 5 days. No one can accurately predict hospital confinement and because of that, I signed my client up for hospital indemnity insurance to act as supplemental insurance to the Medicare Advantage plan. I wrote the plan to pay $300 per day for 6 days. Do you think this supplemental insurance was worth it? Well, after a while my client had to have a hospital stay. Since hospital indemnity insurance was purchased, they didn’t have to pay out of their pocket for hospital costs. All they had to do was fill out a claim form from the insurer, and they received everything they were entitled to. Another way that could be handled is by showing your hospital indemnity insurance card along with your medicare advantage card so that a person won’t have to wait on a claim form in the mail.

Say No to High Hospital Costs

No one wants to think about hospitalization, but it’s important to have the proper protection in place in case the unexpected happens. A hospital indemnity insurance policy can help alleviate some of the financial burdens that come with a hospital stay. I am a licensed insurance agent and I can help you to see if hospital indemnity insurance is right for you. Call us today at 1-888-318-6873!