Hospitalzation Insurance Policy

A hospitalization insurance policy is a supplemental policy you can purchase to help cover the out-of-pocket expenses a health insurance plan may not cover if you are admitted into a hospital. Also called a hospital indemnity insurance policy, a hospital insurance plan pays you cash benefits that vary by policy, reason for hospitalization and the number of days you stay in the hospital.

Health Insurance vs. Hospitalization Insurance

• Traditional health insurance plans generally only pay for a percentage of the cost of a hospitalization. Some health insurance plans also may require you to pay a deductible. On the other hand, a hospitalization insurance policy is similar to a short-term disability insurance policy. Hospitalization insurance gives you money if you are admitted into a hospital to help cover the cost of your hospital co-pay or anything you may need. Health insurance may offer coverage for a variety of inpatient and outpatient procedures, while hospitalization insurance generally only covers instances when you need in-patient care. Similar to health insurance, hospitalization insurance policies have a cap on the amount of money paid when you file a claim.

Benefits

• Hospitalization insurance policies will pay cash benefits if you need to stay in the hospital because of an illness or injury. Benefits paid for a hospitalization related to an illness may differ from those related to an injury. Hospitalization insurance also may pay an additional cash benefit for every day you are confined to the hospital with a covered illness or injury. If a hospital transfers you to a rehabilitation unit, or if you need to undergo an invasive in-patient or outpatient diagnostic exam, a hospitalization insurance policy may pay out additional cash benefits. Depending on the insurance company, a hospital insurance policy may provide cash benefits for hospital admittance for the birth of a child.

Limitations

• If you have a pre-existing condition when you purchase a hospitalization insurance policy, you may need to wait six months before you can receive any benefits related to the care and treatment of that condition. A pre-existing condition is a disorder, illness or disease that you received treatment for within the 12 months prior to purchasing the hospitalization insurance policy. An insurance company may deny you benefits if you receive a diagnosis or treatment for an illness, disease or disorder within the first 30 days of purchasing a policy. Additionally, a hospitalization insurance policy may not cover illnesses or injuries received from self-inflicted violence, participating in an illegal activity, acts of war or from being under the influence of drugs or alcohol.

When to Purchase

• Those who have a health insurance policy with a high deductible could benefit from a hospitalization insurance policy to help pay for out-of-pocket expenses. Women who are not yet pregnant but are planning to conceive a child also could benefit from hospitalization insurance, as well as individuals who have a family history of diseases or illnesses that may require hospitalization.