A Hospital Indemnity Plan is usually referred to as HIP. Indemnity plans are also known as “fee-for-service” plans. This policy is designed to offset or eliminate hospitalization costs.  

Three of the main advantages of HIP are: 

  1. Benefits are paid directly to the policy holder 
  2. Most plans have simplified underwriting 
  3. HIP can be packaged with any other insurance plans, such as: 
  • Medicare Advantage (MA, Part C of Medicare) 
  • Medicare Supplement (example: High Deductible F or Plan K)
  • Group coverage
  • Stand-alone plan

Target Market and Timing 

Also, note that Hospital Indemnity can be sold at the same appointment as it is listed on the Scope of Appointment (SOA) form. 

How to Explain HIP 

Here’s a statement you can make to explain HIP: 

“We can structure the hospital benefit I mentioned earlier to have a lump sum benefit to be delivered to you to help pay for chemotherapy, doctor office visits, other therapies, travel if you want to get treatment out of town, and/or hire a home health aide to assist you and your family during the chemo process, for example.” 

Summary of Benefits 

Below is an example based on a Medicare Advantage Summary of Benefits that provides an in-network hospital copayment of $345 per day for days 1-5. (Check the benefit plans for your area as they may differ.) 

You could say something to begin like: 

“We do have a hospital benefit available that can offset some or all the hospital co-payment. I will explain that benefit in greater detail at the end of this book.” 

To go into more detail using the above summary of benefits, you could explain: 

“When you are admitted to the hospital, your co-payments will be $345 per day, days 1-5. After day 6 you are covered 100%.” 

Three Options 

When you reach the end of the summary of benefits, you can offer three options for your clients to choose from:

Option 1 – Plan with full copayments at $X per month

Option 2 – Above plan with the hospital benefit that will offset some or all the costs of being an inpatient for only $X per month 

Option 3 – All of the above, plus a cancer benefit that will give you $X to help offset treatment costs that are not covered by Medicare or insurance for $X per month

Additional Benefits 

Depending on the carrier, there may be additional riders you can add to the coverage. These might include: 

  • Ambulance Services
  • Skilled Nursing
  • Outpatient Services
  • Cancer Lump Sum Benefit

The cancer lump sum benefit is a popular rider that provides a lump sum of money (usually between $1,000 and $10,000) on the first diagnosis of certain cancers. 

Remember to focus on structuring the benefits to meet your client’s needs by finding out what is most important to them. You are their navigator when it comes to getting the best Medicare solution for their situation. 

For more on cross-selling and explaining ancillary products, visit this link: https://medicarepro.co/explaining-ancillary-products/ 

If this was helpful, let us know in the comments below. Also let us know what you want to learn more about to grow your book of business. 

Join our team! If you are a Medicare agent and have questions about Sales or Medicare, call Arnie Fulmer at 702-820-3133. Arnie Fulmer is a Senior Market Advisor and the principal owner of Fulmer Insurance Group, a Medicare Brokerage Agency located in Las Vegas and licensed in multiple states. 

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