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4 Facts You Need to Know About Hospital Indemnity Insurance

City hospital with place for text – modern vector illustration. Medical center on urban background, nice park with trees. Blue sky with clouds. Clinic with first aid. Concept of healthcare and emergency

Also known as Hospitalization insurance, indemnity insurance is a plan that will pay certain benefits if you’re ever confined to a hospital for reasons planned or unplanned. While many are forced to lose income when an unexpected medical crisis occurs, hospital indemnity insurance helps you protect your budget while dealing with your health.


Though hospital indemnity insurance is not medical insurance, it can provide payment for every day you spend in the hospital. It might even cover additional expenses, depending on your plan. That means you can put this money towards your medical expenses or even just other things. Hospital indemnity insurance gives you the peace of mind to know that no matter your medical emergency, you don’t have to worry about losing your valued income. This guide will not only help you learn more about hospital indemnity insurance, but it will also explore 4 facts you need to know today to make the right choice for your future.

1. It’s not health insurance.

A lot of people mistakenly believe that indemnity insurance is a type of health insurance. It’s not, but that doesn’t mean it can’t make your current health plan even better. While your health insurance covers treatment and stays in the hospital, it won’t necessarily cover all the costs. Similarly, if you’re confined to a hospital, you’re not going to be able to go to work. That means lost income, and these things add up quickly.


Think of hospital indemnity as a supplemental insurance. It’s a way to claim back some of that lost income for every night you have to spend in the hospital. This money can be used however you wish, and you can even put it towards your medical costs.

2. It’s a great option for families.

When it comes to protecting your family, you need to make sure your finances are always secure. If one parent is confined to a hospital for any amount of time, that loss of income can have devastating effects on a family. With indemnity insurance, this stress is lessened since there is still money coming into the budget.


Additionally, a family coverage plan can provide even more relief. If a parent or guardian needs to take time off work to care for a child in the hospital, this coverage can apply as well. One in six hospital visits is made by children and adolescents, and these, on average, last up to four days. Parents can’t afford to overlook indemnity insurance.

3. It’s not expensive.

There’s a stigma around health insurance that makes it all seem expensive. Believe it or not, hospital indemnity plans are affordable, and they can even prevent financial strain. Visits to the hospital are not cheap. They can leave people suffering the financial consequences for years.


If you’re healthy and relatively young, the costs for this insurance are as low as $5 per month. You can’t always prepare for every financial step in your life, but this is a move you can be confident in making.

4. You can apply the funds to anything.

Unlike other types of insurance that come with strict rules about how to apply funds, there are no strict purposes of indemnity payments. You can use them for health-related costs that might be out-of-pocket, or even just your living expenses.


If you’re in the hospital, you’re left without a way to maintain your income. Without the proper planning, that could leave your budget damaged for years. In 2012, hospital stays averaged $10,000. Indemnity coverage can be applied towards that cost, and it can just help lessen the stress while you’re at your most vulnerable.


When it comes to being protected, indemnity insurance is worth the peace of mind. For a relatively low cost per month, you can feel secure that if you’re confined to a hospital for any period of time, you won’t suffer losses of income. While staying in a hospital will never be pleasant, it doesn’t have to have life-altering financial consequences.