When you’re hospitalized, chances are there will be expenses that you have to pay yourself, even with an existing healthcare plan. A hospital indemnity insurance plan can cover a percentage of your income while you’re out of work and in the hospital. It provides a cash benefit paid directly to you, which can help with your out-of-pocket expenses. One form of this plan is known as hospital confinement indemnity insurance.
In short, indemnity health insurance plans cover the expenses that you’d normally have to pay for, beyond what your health or hospitalization insurance covers. When you are hospitalized, you’ll face medical and living expenses. Healthcare or hospitalization insurance can cover the medical expenses, but living expenses are not usually covered. Most likely, that expense will come out of your own pocket and can potentially disrupt your retirement and savings funds.
An indemnity insurance policy can help you pay for those living expenses. As soon as you’re admitted to a hospital, the policy goes into effect, providing a daily benefit that supplements your normal insurance policy. The daily benefit you receive does not take medical expenses into account.