What is hospital indemnity insurance?

Hospital indemnity insurance (also known as hospital confinement insurance or simply hospital insurance) is supplemental medical insurance coverage that pays benefits if you are hospitalized. While health insurance pays for medical services after copays, co-insurance, and deductibles are met. Hospital indemnity insurance pays you if you are hospitalized regardless of any other coverage you may have.

There is no one-size-fits-all. Every hospital indemnity plan is different. Common examples of the type of benefits these plans may offer are a fixed benefit for admission to the hospital, a fixed benefit for an overnight stay, and a fixed benefit for each overnight stay in an intensive care unit. Hospital indemnity insurance policies may include other types of benefits as well. Among those are a benefit for treatment in an emergency room, and a benefit paid for certain outpatient procedures. Some hospital indemnity insurance policies may even pay a benefit for certain specified diseases or accidents. But normally people purchase separate indemnity policies (cancer, critical Illness, or accident, etc. as specialized policies offer more robust benefit amounts.