Recently, my friends got their medical insurance policies! I felt thrilled seeing them invest in something that will surely be of use in the future.
Now, medical insurance is cool and all, especially now that any form of coverage will make you feel safer. But as I asked them if they got a hospital indemnity to go with it, they answered with puzzled faces and “No’s.”
I was not surprised, but I would have liked them to enter a hospital indemnity policy along with the health insurance plan. Because if their policies are not enough, then there would be nothing to offset the upcoming expenses.
A hospital indemnity, though not of absolute importance, is essential in keeping yourself worry-free. You do not need to scramble around to find out where you will find money to pay for hospitalization costs; your insurance provider will do it for you.
So in the end, I advised them to get a hospital indemnity as a supplemental form of insurance. With how the world works today, you can never be too careful and too sure.
This article will aim to enlighten my readers about hospitalization insurance and its importance.
What Is Hospital Indemnity?
A trip to the hospital takes a toll on your mind, whether it is planned or unplanned. Even more so when you find out that your current medical insurance does not cover all of your expenses.
This is where hospital indemnity insurance comes in.
Hospital indemnity will keep your finances afloat and on track even while you are inside the hospital. In brief, a hospital indemnity plan is a form of supplemental insurance, which pays for the cost of hospitalization in the event that some expenses are not covered by regular medical insurance.
You can add a hospital indemnity to your current health insurance plan, and the coverage will depend on your chosen plan.
Generally, a hospital indemnity covers:
- Confinement, whether or not there is surgery
- Intensive Care Unit confinement
- Critical Care Unit confinement
Some plans go the extra mile and cover even more events and situations, such as:
- Continuous care;
- Outpatient procedures, such as outpatient surgery, laboratories, and diagnostic imaging;
- Emergency rooms;
- Physician office visits; and
- Usage of an ambulance.
Hospital indemnities complement your current health coverage and pay for what it does or does not cover. It bridges the gap between standard medical insurance coverage and out-of-pocket costs you may incur but are not covered by the medical plan.
Hospital indemnity is designed to be the easiest and most economical way to supplement or bolster your current medical plan. With it, you are rewarded with an extra level of peace of mind and security.
Relevant: Read why you should get health insurance here
Why Hospital Insurance?
An estimated 78% of American citizens are living paycheck to paycheck. Their wages and salaries are just enough for their day-to-day needs.
This begs the question “Can you afford an extended hospital stay if you are suddenly admitted?” Those falling under that statistic probably cannot afford to.
Here are some reasons why investing in a hospital indemnity plan has its merits.
Reduces Financial Burden
An extended stay in the hospital is associated with high out-of-pocket costs and can strain even the biggest of budgets. For your well-being, you cannot ignore the care you need, even if it breaks the bank.
Hospital indemnity insurance pays you for each day spent confined in the hospital, in addition to expenses your plan deems qualified. You can use that money as you wish, whether to pay for those hospital expenses or other costs such as medicine.
No Deductibles
The deductible is the amount of money you have to pay an insurance claim before the provider starts the payouts. Insurance premiums are typically higher with lower deductibles and lower with higher deductibles.
With a hospital indemnity, however, you do not have to worry about deductible amounts. You only need to purchase a policy, make the periodic payments, and the insurance company will pay you upon hospitalization.
This relieves the burden of having money ready for the deductible payment.
Full Family Coverage
It is possible to purchase a hospital indemnity plan for all members of your family. Contact your insurer or your employer on how you can do this.
Insuring not only you but your family as well, goes a long way to achieving financial security, and mental and emotional well-being.
Renewable Until Age 65
In general, hospital indemnity policyholders have the power to continue the coverage by the timely payment of periodic premiums, up until the age of 65.
That is a long time to keep enjoying the security the policy provides.
How Hospital Indemnity Works
In connection with the fact that many Americans are living from one paycheck to the next, most also do not have the savings enough to pay for unprecedented expenses. And as you now know, hospital indemnity is a great way to pay for any purpose, either for hospital bills or out-of-pocket costs.
Let me give you an illustration of hospital indemnity. All amounts in this situation are made-up and are merely provided to show how the supplemental insurance works.
X is a salaryman, and he and his family are under an insurance policy from his employer. The deductible under the plan is $1,000, with $100 monthly premiums.
To help cover expenses should hospital confinement for any of him, his wife, and two kids occur, X shops around for an indemnity policy. He pays $40 per month that will pay $250 each day if a member of the family is hospitalized.
Three years later, his son was hospitalized for ten days because of a urinary tract infection. At $250 per day, the plan pays her a total of $2,500.
X can use the amount for anything he wants. He can use it to cover his deductible, or to pay for hospital bills, or to offset the after-discharge medicines and supplies.
Basically, that is how hospital indemnity operates. You pay premiums, then the insurer will pay you, even without a deductible payment.
Here are some things to remember about a hospital indemnity.
It Is Not Health Insurance
But, it does make your health insurance better. Health insurance pays after copayment, or deductible amounts have been satisfied, while hospital indemnity pays when specific events occur, without deductibles or copayments.
Benefits can be paid in a lump sum for short hospital trips, or on periodic bases, such as daily and weekly, for longer confinements.
You Can Use It To Pay For Anything
Hospital indemnity insurance payouts can be used to cover for whatever purpose the policyholder chooses. If he wished to pay a personal debt, then that is fine.
Unlike health insurance plans, hospital indemnity plans are not tied to services, but the happening of events.
It Is Affordable
No one ever accused a hospital indemnity plan of breaking people wallets, or even if some are, then they are pretty minimal numbers. The monthly cost of indemnity premiums for the healthy are as low as the cost of a single sandwich.
Facts About Hospital Insurance
- The benefits you receive are already predetermined.
- The amount will be paid, even if you have any other policy active.
- Hospital indemnity plans (HIPs) range from basic and few to robust and comprehensive coverages.
- Cash benefits are tax-free.
- Approval is guaranteed for members, even without a physical exam.
- It might take some time, but even people with already existing conditions at their time of application can still be granted hospital indemnity.
How To Get Hospital Insurance
A hospital indemnity plan is straightforward to get and could be acquired in two ways: through your employer, or a private insurance firm.
Through An Employer
If you are employed, your boss may offer you insurance policies, including hospital indemnity. Talk to the benefits administrator of where you work and the specifics of the plan.
Evaluate if the cost is reasonable for the coverage it provides, and compare it with separate private insurers to find the policy that suits your budget and needs.
Through A Private Firm
If you opt to get hospital indemnity through a private firm, shop around for quotes and compare them. Hospital indemnity mainly differs in the amounts involved, but there could be some differences in coverage, too.
Once you select the provider you want, contact them. Follow the procedures and requirements they will give you to ensure a smooth application process.
After confirmation of your application, then pay the premium amounts periodically.
If you will need the indemnity, contact the provider and give them the information they need. They will pay the amounts upon confirmation of your request.
Frequently Asked Questions
Can hospital indemnities be used to cover other expenses?
I cannot stress this enough; the payouts from hospital insurance can be used for any kind of expense, and your insurance company would not fine you or restrict you from anything.
Use the benefit as you see fit, such as for hospital bills, debts, and other expenses.
Why would I need additional hospital coverage?
Even if you think that you have good medical coverage, a hospital stay is costly. Even the highest quality of medical plans will leave you some things to pay for.
Also, expenses and costs such as insurance deductibles, extra fees for out-of-hospital care, and copayments for visits of doctors will add up real fast.
Financial support in trying times like these will prove to be a valuable asset and will lead to fewer worries for you and your family members.
Do I directly receive the benefits?
Yes, payments are directed to the policyholders themselves. Not to the doctors, to the hospitals, or other healthcare professionals. For convenience, you might even receive a check for encashment.
Do I need to pass a medical exam?
If you are offered hospital indemnity insurance, and you accept, then you are a guaranteed policyholder. You rarely need to answer health-related queries or take medical tests to ensure the status of your health.
How much does a typical hospital insurance coverage cost?
The premium of a plan depends on many factors such as age, gender, and marital status. Some plans offer fewer coverages ranging from $5 to about $40 per month.
There are also those plans that offer a more comprehensive range of benefits but have premium costs of anywhere from $27 to about $400 a month.
In any rate, a hospital indemnity costs less than you might think. It is designed as an economical way to bolster your current health care plan.
Is There A Waiting Period?
The waiting periods vary depending on the indemnity itself. In general, there is a 30-day waiting period before you can use the benefits.
However, there may not be any waiting period for accidents that need hospitalization. Before settling on an insurance provider, make sure to ask their agent about possible waiting periods.
Can you add dependents?
Most policies allow the addition of dependent children to their policies, with the condition of higher monthly premiums.
Talk to your insurance agent to know how to add dependents and the additional premium per dependent.
How Do I Pay?
If you received your coverage from your employer, then payment of periodic premiums will be in the form of payroll deductions.
If you enrolled for coverage at a private firm, then premium payments can be paid through bank transfers, paying at the company personally, or through other accredited payment channels.
Talk to your agent for payment methods and details.
Wrapping Up!
The price of co-payment fees, deductibles, and co-insurance fees rise by the year. Due to this, more and more policyholders go for hospital indemnity to complete their coverage and to help pay their out-of-pocket expenses.
A hospital indemnity plan will aid you in offsetting the hospitalization expenses you incur, as well as provide coverage to the costs not under a medical insurance plan.
Hospital insurance alone will not be able to ease your worries. But using it to supplement an already good medical insurance coverage will make the unexpected much easier to handle.
So that is the discussion on hospital indemnity insurance.
Are you covered by one? Do you have questions?
Share your experiences or queries in the comments section below.
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