You Can Sell More Hospital Indemnity Insurance

Major medical deductibles may leave patients with big bills

(Photo: Thinkstock) (Photo: Thinkstock)

There are more than 136 million emergency room visits in the U.S. each year, and in 2015, there were more than 35 million hospital admissions. Costs for such visits can range from roughly $350 or more for emergency room visits for illnesses like earaches, pink eye or sinus infections to nearly $11,000 for the average hospital stay of 4.5 days, according to data from government researchers and trade groups.

While major medical insurance helps, high-deductible health plans continue to gain popularity and may require people to pay $1,000 or more before insurance coverage kicks in. Considering 65% of Americans have less than $1,000 to pay out-of-pocket medical costs, owing $350, $11,000 or anywhere in between can be financially crippling. It’s vital for clients and their employees to be prepared for expenses that may result from an unplanned hospital visit.

(Related: 3 Opportunities in the Health Gap Market)

Hospital indemnity insurance helps protect employees from the potentially overwhelming costs of a hospital visit, which can have a ripple effect on their lifestyles for months – or years – to come. Advisers can help clients and their employees have a plan in place so they don’t have to put their lives on hold. Below are a few tips to keep in mind while discussing hospital indemnity insurance with your clients:

1. Highlight what makes hospital indemnity insurance helpful.

Although employees have a general knowledge of how their major medical insurance works, they may not understand the benefit of having supplemental hospital indemnity insurance. This is an opportunity to help them understand that while major medical pays for most medical services, hospital indemnity insurance is designed specifically to help with out-of-pocket costs that insurance typically doesn’tcover, like a deductible or copayment. These benefits are paid directly to the insured, unless otherwise assigned, rather than the doctor or hospital so they can spend the money where it is most needed.

Family (Photo: Shutterstock)

2. Explain how hospital indemnity insurance complements existing coverage.

As their trusted adviser, you can point out holes in coverage and explain that not all hospital visits are a result of a catastrophic accident or critical illness. Routine medical procedures, such as a child’s appendectomy or the need for diagnostic bloodwork, can just as easily lead to out-of-pocket costs that prevent employees from having the cash they need to make everyday purchases.

3. Unveil the unexpected benefits of hospital indemnity insurance.

Rising health care costs and the stress of accumulating hospital bills can have a negative effect on employees’ mental and financial health, leading to lower morale and productivity at work. Advisers can show their clients how supplemental insurance options like hospital indemnity insurance can help give employees peace of mind so they can focus on their jobs, and not on bills. Advisers can show them how hospital indemnity insurance cash benefits can be used to cover living expenses, such as child care, lawn care or even a dog walker, helping employees to live their lives uninterrupted despite a hospital stay.  Not to mention, offering a robust benefits package can help clients attract and retain top talent.

4. Help protect the day-to-day.

A hospital stay is disruptive. Most of us likely know someone who wishes they had more protections in place ahead of an accident or illness. Show clients how offering hospital indemnity insurance can help employees take charge and help protect their finances from an unforeseen hospital visit. Even though employees’ health may change, the way they live their lives doesn’t have to.

--- Read Actuary Sizes Up 2018 Individual Health Picture on ThinkAdvisor.

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