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What is Hospital Indemnity Insurance? How does it work?
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What is Hospital Indemnity Insurance?

You must have heard of hospital indemnity plans or indemnity coverage. Reports state how a large chunk of individuals globally are unprepared to meet sudden costs arising from hospitalization and medical emergencies. Even while possessing suitable health insurance plans, many additional costs lead to severe financial stress for these people. This leads to depletion of savings and investments or even bankruptcy in extreme scenarios. Even the top health insurance plans come with specified limits. Hence, hospital indemnity insurance is the supplemental insurance offering for covering hospitalization and other costs linked to post-treatment care, family expenses, and more.

Hospital indemnity insurance is a plan that you can buy over and above the health insurance policy offered by the Government, employer or private insurance company. You will have to pay a monthly premium amount just like you do for other insurance policies and get a fixed amount for covering expenditure if you are hospitalized for treatment. Based on the plan that you are buying, you may tap into the available benefits for co-insurance, deductibles, medication, transportation, rehabilitation and costs of home care. 

What is Hospital Indemnity Coverage? 

The hospital indemnity meaning is that the insurance policy will offer a lump sum payout depending on factors linked to hospitalization. Conventional health insurance has various specifications regarding services that are covered while hospital indemnity insurance may be provided in whichever way you require, enabling prioritization of health. This plan type does not come with any co-insurance, deductibles, network limitations and other factors.

Hospitalization, CCU (critical care unit), and ICU (intensive care unit) are circumstances necessitating payouts under the best hospital indemnity insurance plans. Based on the plan being purchased, emergency rooms, outpatient processes, ambulance transportation and other factors are given coverage. These plans are also family-oriented and may offer coverage for the policyholder, his or her spouse and children.

When Hospital Indemnity Insurance is Necessary?

  • When someone suffers from a chronic ailment like diabetes and heart ailments, leading to hospitalization. 
  • Someone who is pregnant or planning to have a child in the future, while requiring coverage for additional days in the hospital post child-birth. 
  • An upcoming surgery/procedure is required with hospitalization. 
  • Additional coverage is required if there are any accidents. 
  • If there is a high-deductible health insurance policy in your portfolio. 
  • If you desire greater mental peace and security for any future exigencies. 


Cost of Hospital Indemnity Insurance

Costs of these insurance plans may vary on the basis of diverse aspects and the type of plan that is selected. You should keep comparing available plans in order to get a fair idea of what it costs. You should always stick to a budget without compromising on necessities. Some plans offer daily payouts based on the premium amount that is paid by the policyholder. 

You should always consult your insurance advisor and get a few quotes. The premium is determined on the basis of multiple factors like sex, age, deductible amounts, and location. The payout amounts and premium costs vary across insurers. 

What to Look for While Purchasing Hospital Indemnity Insurance? 

  • Time Of Payment: When will the plan ensure a payout for the policyholder? How is this linked to hospitalization? Some companies, for instance, process claims within a duration of 5-7 business days for each stay in the hospital. 
  • Coverage Factors: You should always consider the coverage length while choosing a plan. You should note that indemnity insurance does not usually come with a limit on the term but may have a waiting period. This is the amount of time that you have to wait out before undertaking the claim procedure or reimbursing your costs. This duration may vary across insurance companies. Some companies may have waiting periods before allowing the payout of indemnity benefits for specific treatments/procedures while others may not always have such limitations. 
  • Family Or Personal Coverage: Just like your medical blueprint, the insurance plan is also family-oriented. It should offer coverage for not only yourself but also your spouse and children. This coverage amount should be tailored as per your family’s specific requirements. 
  • Age-Based Limitations: Indemnity insurance may be bought by those between 18 to 65. Monthly premiums are lower for younger policyholders and go up steadily with the onset of age. Upon attaining the age of 65, the plan cannot be renewed any longer, since other policies are implemented. These age-based limitations are dependent upon the insurance company that is selected. They may also vary likewise.


The Conclusion

You should keep a close eye on hospital indemnity insurance plans. Applications for the same are not as tough as you imagine. You can always consult your insurance advisor, any financial expert or industry professional. You can also compare health insurance plans in order to find the ones that suit your needs in the best possible manner. These plans help immensely in attaining payouts for meeting expenditures where your employer’s insurance policy is not sufficient in terms of coverage.


What are the usual factors drawing payouts under hospital indemnity insurance plans?

Hospital indemnity insurance plans are characterized by payouts for certain conditions or circumstances, depending on the premiums that are paid. Scenarios like hospitalization, CCU (critical care unit) and ICU (intensive care unit) draw payouts under these plans.

Should a diabetic purchase a hospital indemnity insurance plan?

Yes, experts believe that diabetics or those with such chronic conditions should always purchase these hospital indemnity insurance plans. This will help them cover the costs of future hospitalization or sudden treatments.

What are the age limits under hospital indemnity insurance plans?

The age limits may vary across insurance companies. They are usually between 18 and 65 in most cases. Policies are usually non-renewable once an individual attains the age of 65.

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