Hospital indemnity insurance is a supplemental health insurance plan that pays fixed cash benefits directly to the policyholder when they are hospitalized due to illness or injury.

Unlike major medical insurance, these plans do not pay doctors or hospitals. Instead, they provide cash payments that policyholders can use however they choose, including:

• Hospital stays
• Deductibles and coinsurance
• Prescription costs
• Transportation or lodging
• Everyday living expenses

This flexibility is what makes hospital indemnity plans attractive to consumers and easy for agents to cross-sell.

From an agent’s perspective, hospital indemnity insurance offers several advantages:

• Year-round sales, not tied to AEP or OEP
• Simple underwriting, often guaranteed issue
• Straightforward benefit structure
• Strong fit alongside existing health coverage
• Affordable premiums that reduce buyer resistance

For agents working in Medicare, ACA, group benefits, or ancillary insurance, hospital indemnity plans help increase revenue per client without adding complexity to the sales process.

1. Lead With the Problem, Not the Product

Most consumers underestimate the financial impact of a hospital stay. Agents who focus on out-of-pocket exposure before introducing the plan tend to see higher engagement.

2. Explain Benefits in Plain Language

Hospital indemnity plans are not complex, but clarity matters. Avoid jargon and focus on:

• When benefits pay
• How much they pay
• How the money can be used

3. Position It as Supplemental Coverage

Hospital indemnity insurance should always be positioned as additional protection, not a replacement for comprehensive health insurance.

4. Use Real-World Scenarios

Simple examples, such as a three-day hospital stay, help clients quickly understand value without feeling overwhelmed.

One of the biggest advantages for agents is flexibility.

Hospital indemnity plans are typically available:

• Year-round
• Outside of Medicare enrollment periods
• Outside of ACA Open Enrollment
• As voluntary benefits or individual plans

This makes them an ideal product for cross-selling and retention strategies.

While benefits vary by carrier, many plans include:

• Daily hospital confinement benefits
• ICU or critical care benefits
• Admission and discharge payments
• Surgical benefits
• Wellness or screening benefits (on some plans)

Agents should always review carrier-specific outlines of coverage before presenting.