If you have health insurance and wondering if should you buy hospital indemnity insurance, let’s give you an example to answer this question.
Let’s say that you’ve been in a car accident and need to be hospitalized immediately. You have health insurance but you don’t have hospital indemnity insurance. Your health insurance cover 80% of hospitalization costs but you need to pay 20% of the remaining costs ( coinsurance) and deductible if you haven’t met one in time when you were in hospital and a three-day stay in the hospital costs around 30 000$. One way to avoid the large costs of hospitalization is getting hospital indemnity insurance.
Types of Hospital Indemnity Insurance
Hospital Indemity insurance is a type of supplemental health insurance that helps you cover the costs of hospitalization that aren’t covered under your health insurance plan. Those policies are an addition to your health insurance and don’t replace your primary source of coverage. It will help you get covered for hospital confinement, intensive care unit confinement, and critical care unit confinement. Some types of plans even cover outpatient surgery, continuous care, outpatient x-rays, and lab procedures, outpatient diagnostic imaging procedures, ambulances, emergency rooms, and physician office visits.
There are two main types of hospital indemity insurance for those under 65 that have ACA or group employer plans. The first and most popular type is a daily benefit which means that if you have 400$ dollar benefit and you stay four days in the hospital, you have four days times the benefit which is 1600$. The other option is lump sum types of plans where you just go to the hospital and when you are admitted you’ll have a large lump sum which could be from 10000$ to 20000$.
When Should I Consider to Buy Hospital Indemnity Insurance?
Here are several reasons why you should purchase hospital indemnity coverage:
- You have a chronic condition and because of it you could get hospitalized at any time
- You need to go to surgery so it is required that you stay in the hospital
- If you are pregnant: some plans include coverage for the neonatal intensive care unit after the childbirth
- If you just want to have additional coverage in case of an accident that would require hospitalization
- If you want to reduce your costs as much as possible in the worst case
- If you want to have a more comprehensive coverage
- Financial protection saves a large portion of the money
Hospital Indemnity Insurance vs. Critical Illness Insurance
A lot of people when purchasing supplemental coverage get confused thinking that hospital indemnity insurance and critical illness insurance are the same things. Although most supplement insurance plans are similar the main differences are what type of coverage they provide.
Unlike, hospital indemnity insurance, critical illness insurance only will cover specific health conditions like cancer, heart or stroke conditions, organ transplantation, etc. It will not cover chronic conditions like diabetes, nor will cover hospital stays in case of an injury. However, just like hospital indemnity plans, critical illness plans also have large lump sum benefits you can yous whenever you need them.
If you are not sure you need a supplemental insurance plan, we in Jersey Insurance Solutions will be happy to help you answer all questions about benefits you could get. Also, if you are interested in knowing more about health insurance in Morristown, please check out our blog here. Our experienced agents can help you find a plan that best suits your needs and budget, so call us today to begin this journey together!
Thomas M. Brzezinski is one of the founding partners of WMAG William & Michael Advisor Group LLC and Jersey Insurance Solutions. He has been involved in the insurance industry for over ten years and specializes in developing client relationships that last a lifetime.
