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Headed to the hospital? This is how hospital indemnity insurance can help

This type of supplemental insurance may help if you’re hospitalized in the future.

Having to spend time in the hospital can be unsettling, whether you’re the one being treated or it’s a loved one. And alongside that concern, there is often the stress of worrying how you’re going to pay for it.

This is where hospital indemnity insurance can come in. (You may also see it referred to as hospital insurance or hospitalization insurance.) It’s a type of supplemental insurance plan that can provide you with financial help if you’re hospitalized or receive medical treatment in a hospital, says Michael Orefice. He’s the senior vice president of operations at SmartFinancial in Newport Beach, California. (Supplemental insurance is additional insurance that helps pay for health care costs not covered by your regular plan.)

It also helps you cover out-of-pocket expenses you might have to pay for a hospital stay, such as deductibles, copayments and nonmedical costs. (A deductible is the amount you pay out of pocket before your health insurance covers the rest, while a copayment is a fixed amount you pay for health services.)

In some cases, hospital indemnity insurance may also cover outpatient surgical procedures, such as knee-replacement surgery. “It can provide some peace of mind, especially if you have a lot of medical issues and anticipate that you might need to be hospitalized over the next year,” Orefice explains.

Here’s a closer look at hospital indemnity insurance — and the reasons why you may want to consider purchasing it.

Want to explore a supplemental health plan? Explore your options now, or contact a licensed insurance agent at 1-844-211-7730.

How can I use hospital indemnity insurance?

Let’s say you just purchased a hospital indemnity insurance plan. If you’re hospitalized, you’ll need to complete a claim form and submit it with copies of your receipts. Then either you or your provider, if you have assigned benefits, get a check for the fixed amount of your selected benefit.

“Your insurance company will pay out a predetermined lump-sum benefit directly to the policyholder, regardless of primary insurance coverage,” explains Orefice.

You won’t face any deductibles, and your benefits are the same regardless of your network or provider. Just keep in mind that you may need to stay within certain networks or use certain providers to get the most coverage out of your major medical plan.

Can hospital indemnity insurance help me pay for more than just a hospital stay?

Hospital expenses go beyond simply being in the hospital. You may need to find:

  • Babysitters for kids
  • Gas or travel money so you can visit your loved one in the hospital
  • Places for you or your family to stay near the hospital

The good news with supplemental hospital indemnity insurance is that you can use the benefits to pay for nonmedical costs associated with the hospitalization. Those could include transportation, lodging and childcare, points out Orefice. You’ll just need to save and provide your receipts.

How much does hospital indemnity insurance cost?

What you end up paying by way of a monthly bill (premium) has to do with various factors. These include your:

  • Age
  • Health status (for example, whether you smoke)
  • Level of coverage you choose
  • Number of dependents on your policy

Looking for a way to get supplemental insurance? Enter your ZIP code to search available plans, or call a licensed insurance agent at 1-844-211-7730.

Are there certain health plans that hospital indemnity insurance works best with?

Hospital indemnity insurance is useful for anyone. But it may be most helpful if you have a High Deductible Health Plan, or HDHP, notes Bill Green, owner of the Green Insurance Agency in Orange Park, Florida.

An HDHP is a plan that has a higher deductible than a traditional insurance plan. Your monthly insurance bill (premium) is lower, but you’ll end up paying more out of pocket before your insurance company pays the rest.

“Depending on your plan, you may have to pay thousands out of pocket for your hospitalization bill before your health insurance kicks in,” says Green. A hospital indemnity insurance plan can cover most of those out-of-pocket costs. It’s also a sensible option if you’re hospitalized and most of the providers are out of your insurance network.

While you can purchase hospital indemnity insurance as a stand-alone policy, it’s not a substitute for actual health insurance. “In many cases, you’re better off buying a comprehensive health insurance policy, especially if you anticipate a lot of medical expenses,” advises Orefice. But if you can’t — for example, it’s too expensive, or one isn’t offered by your employer — hospital indemnity insurance could be your best option.

Want coverage that extends beyond your regular insurance plan? A supplemental plan, such as hospital indemnity insurance, could be the answer. Learn more now, or call a licensed insurance agent at 1-844-211-7730 to discuss your options.

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