Whether it’s a planned procedure or an unexpected emergency, a hospital stay can take a toll on your well-being — and your finances. This is where hospital indemnity insurance, also known as hospital insurance or hospitalization insurance, can help.
It’s a type of supplemental insurance plan that can provide you with financial help if you’re hospitalized or receive medical treatment in a hospital, says Michael Orefice. He’s the senior vice president of operations at SmartFinancial in Newport Beach, CA.
Hospital indemnity insurance also helps cover out-of-pocket expenses related to a hospital stay, such as deductibles, copayments and nonmedical costs. In some cases, it may also help with outpatient surgical procedures, such as knee-replacement surgery.
“It can provide some peace of mind, especially if you have a lot of medical issues and anticipate that you might need to be hospitalized over the next year,” Orefice explains.
Here’s a closer look at hospital indemnity insurance — and how to decide if it might be a fit for you.
Worried about the cost of an unexpected hospitalization? Learn how hospital indemnity insurance can help.
How does hospital indemnity insurance work?
Hospital indemnity insurance pays a fixed benefit for covered hospital stays or care.1 After you get care, you’ll fill out a claim form and send copies of your receipts to your plan. Then you or your provider, if you assigned benefits, will receive payment for the covered amount. “Your insurance company will pay out a predetermined lump-sum benefit directly to the policyholder, regardless of primary insurance coverage,” explains Orefice.
You won’t have to meet a deductible, and your benefits are the same regardless of your network or provider.1 Just keep in mind that you may need to stay within certain networks or use certain providers to get the most coverage out of your major medical plan.
Does hospital indemnity insurance cover more than medical bills?
Hospital expenses go beyond simply being in the hospital. You may need:
- A babysitter for your kids
- Gas or travel money to visit your loved one in the hospital
- Lodging for you or your family near the hospital
You can use hospital indemnity insurance benefits to pay for any of these nonmedical costs associated with the hospitalization.1
How much does hospital indemnity insurance cost?
Your monthly bill (premium) for hospital indemnity insurance depends on factors such as:
- Age
- Health status (for example, whether you smoke)
- Level of coverage you choose
- Number of dependents on your policy
A little planning now may help reduce financial stress later. Explore hospital indemnity insurance plans online.
Which health plans work best with hospital indemnity insurance?
Hospital indemnity insurance is useful for anyone. But it may be most helpful if you have a high deductible health plan, or HDHP, notes Bill Green, CEO and founder of the Green Insurance Agency in Orange Park, FL.
An HDHP is a plan that has a higher deductible than a traditional insurance plan. Your monthly insurance bill (premium) is lower, but you’ll pay more out of pocket before your insurance coverage begins.2
“Depending on your plan, you may have to pay thousands out of pocket for your hospitalization bill before your health insurance kicks in,” says Green. A hospital indemnity insurance plan can help offset those out-of-pocket costs. It’s also a good option if you’re hospitalized and most of the providers are out of your insurance network.
While you can purchase hospital indemnity insurance as a stand-alone policy, it’s important to remember that it’s not a substitute for traditional health insurance coverage.
“In many cases, you’re better off buying a more comprehensive health insurance policy, especially if you anticipate a lot of medical expenses,” advises Orefice. But if you can’t — for example, it’s too expensive, or one isn’t offered by your employer — hospital indemnity insurance can help you supplement your coverage.
Frequently asked questions
Does hospital indemnity insurance replace my health insurance?
No, it is a supplemental insurance plan designed to work alongside your primary insurance by providing fixed benefits for out-of-pocket costs. There is a monthly premium for supplemental insurance that is not included in what you’d pay for your primary health insurance.
Can I use the benefits for non-medical expenses?
Yes. Once you receive your fixed benefit payment, you can use it for anything, including rent, utilities or childcare.
Can I use hospital indemnity insurance for my mortgage?
Yes. You can use the fixed benefit payment for any purpose, including mortgage payments, groceries or utilities during your recovery.
Does hospital indemnity insurance have network restrictions?
No. Hospital indemnity benefits are typically paid regardless of which hospital or doctor you choose.
Have questions about how hospital indemnity insurance can pair with your primary health insurance plan? Call 1-844-211-7730 to speak with a licensed insurance agent.
Meet the experts
Michael Orefice is the senior vice president of operations at SmartFinancial in Newport Beach, CA.
Bill Green is the CEO and founder of the Green Insurance Agency in Orange Park, FL.
For informational purposes only. This information is compiled by UnitedHealthcare, and/or one of its affiliates, and does not diagnose problems or recommend specific treatment. Services and medical technologies referenced herein may not be covered under your plan. Please consult directly with your primary care physician if you need medical advice.
Sources:
- UHOne. “Hospital insurance.” Accessed May 29, 2026. Retrieved from https://www.uhone.com/health-insurance/supplemental/hospital-indemnity-insurance
- Healthcare.gov. “High deductible health plan (HDHP).” Accessed May 29, 2026. Retrieved from https://www.healthcare.gov/glossary/high-deductible-health-plan/
Compliance code: 50586-X-0726
