Most primary health insurance plans do not cover all hospital costs. If you’re hospitalized, you can be stuck paying the amounts not covered by your primary insurance, and that can get expensive. A hospital indemnity plan covers some of the costs associated with a hospital stay and may provide extra coverage that your health plan doesn’t.
Hospital indemnity insurance is a type of plan that pays a set amount – per day, per week, per month, or per visit – if you’re confined in a hospital. A hospital indemnity insurance cash plan pays a lump-sum payment directly to the insured for a covered hospital confinement, outpatient surgery, and emergency injury or sickness.
When you experience a hospital confinement, outpatient surgery, or emergency accident or sickness, you submit a claim form along with the receipts for services received. You will receive a lump-sum payment as described in the policy. You can use the cash for whatever you choose.