Hospital Indemnity Insurance
A supplemental policy should have a job: reduce a specific financial exposure that you actually care about.
What hospital indemnity is
Hospital indemnity insurance is separate insurance that pays fixed benefits for covered events according to the policy. Depending on the contract, benefits may be tied to events such as a hospital admission, days confined in a hospital or other specified services.
Why it is sometimes paired with Medicare Advantage
Medicare Advantage plans can have hospital copays and other medical cost-sharing. A hospital indemnity policy can be evaluated as one possible way to offset specified exposure. The useful comparison is the policy premium and benefits versus the actual cost-sharing in the Medicare Advantage plan.
Questions to ask before buying
- Exactly what event triggers a benefit?
- How much is paid for admission and each covered day?
- Are there waiting periods, exclusions or benefit limits?
- Does the policy address the largest exposure in your Medicare Advantage plan?
- Is the annual premium reasonable relative to the protection?