Hospital indemnity insurance is an insurance plan you can purchase in addition to your health insurance plan. You pay a monthly premium, just as you do for other insurance, and if you end up spending time in the hospital, you receive a fixed benefit amount paid directly to you to help cover expenses.

A hospital indemnity insurance payment could be used for anything, though people often use the benefits for deductibles, coinsurance, transportation, medications, rehabilitation or home care costs. You can also use the money to pay for some expenses incurred as you recover, such as groceries and childcare.

Hospital indemnity insurance payouts are sent directly to you as the policyholder. That’s unlike health insurance, which contracts with providers and pays them directly.

Hospital indemnity insurance provides a payout to you based on circumstances related to hospitalization or other specific health care services. Typical health insurance has specifications on covered services whereas hospital indemnity insurance can be distributed in whatever way you need.

This type of plan doesn’t have deductibles, coinsurance or network restrictions.

Circumstances that would generally lead to payout would be:

- Hospitalizations

-Intensive care

-Critical care

Some hospital indemnity insurance policies may also cover:

-Outpatient surgery

-Ambulance services

-Emergency room visits

Hospital indemnity insurance doesn’t replace your medical insurance. But how do you know if you should purchase this secondary health insurance coverage? Here are a few reasons to consider hospital indemnity insurance:

-You have a chronic condition, like heart disease or diabetes, that could lead to hospitalization.

-You have an upcoming procedure or surgery where a visit or stay in the hospital could be required.

-You’re pregnant or plan on becoming pregnant, and coverage could be provided for any extra days you stay in the hospital after childbirth.

-You want extra coverage in case of accidents.

-You have a high-deductible health insurance plan, which has higher out-of-pocket costs.

-You expect to need out-of-network care and want help to pay for the extra costs.

-You want peace of mind for worst-case scenarios.