Illnesses and injuries that require hospitalization often occur without warning. One minute you are playing a game of basketball at the park, and the next minute you're being rushed to the hospital with severe chest pains or a broken bone. This can lead to a hospital stay with follow-up medical procedures and doctor visits.

And just like that, hospital-related medical bills begin rolling in. According to a U.S. Census Bureau report, "the share of households with medical debt was almost double for those with any member experiencing a hospital stay (31.3%) than for those with no members with a hospital stay (15.8%)."¹

Major health insurance may not cover all those hospital bills. This is where hospital indemnity insurance can help.

What Is Hospital Indemnity Insurance?

Broadly speaking, this coverage pays a cash benefit for hospital stays due to illness, injury or surgical procedure. Some employers may also offer coverage for pregnancy-related hospital confinement.

The coverage pays over and above major health insurance, which may not cover the entire amount depending on the duration and final cost of the stay. While the typical length of a hospital stay has held steady over the past 20+ years at four days, the average cost has increased by more than 120% since 2000, exceeding $13,000 in 2019.²

After health insurance reaches its limits, bills for copays, deductibles, coinsurance, medication, rehabilitation, and other out-of-pocket expenses remain. This can chip away at savings and even lead to bankruptcy—all at a time when recovery should be a top priority.

Who Might Benefit from Hospital Indemnity Insurance?

While it is impossible to know who will require hospital care, there are some circumstances that would indicate a person might benefit from hospital indemnity coverage. These reasons can apply both to an employee and their family members.

They have a chronic condition that increases their risk of an emergency event like a heart attack, stroke, seizure, allergic reaction or autoimmune-related illness. A whopping 60% of Americans are affected by some form of chronic illness.³
They anticipate having a medical procedure in the future that might require a hospital stay.
They are pregnant or plan to conceive in the future, which could necessitate hospital confinement either for a normal pregnancy or complications.
They participate in a risky activity, like snow skiing, skateboarding or surfing, which can lead to an injury requiring hospitalization.
They want to add extra security to protect their family's finances in case of an emergency.