February 27, 2018

Hospital Indemnity plans are perfect for two major groups of prospects:

  1. People who are under 65
  2. Those on Medicare Advantage

Even if you’re primarily a Med Supp agent, you’re going to come across people who could benefit from a Hospital Indemnity plan.

They might be a few years away from Medicare, and they found you doing their initial research, they might already have an MA plan from another agent, or they might demand an MA plan due to the cheaper premium, the free gym membership, or that commercial they saw on TV.

The statistics don’t lie here.

We currently offer 2 Hospital Indemnity plans – one from Sentinel and one from Aetna.

Today, we’re going to take a thorough look at Aetna’s Flex plan – how it works, what the benefits are, what the riders are, and all the fine print.

Just a brief background: Aetna’s been in the senior insurance market for more than 32 years. Most of the ancillary products are underwritten by Continental Life Insurance, which is headquartered right by Nashville, TN with more than 400 associates in that office.

Aetna is also rated “A” Excellent by A.M. Best Company.

Learn more: How to Make a Sale to a Medicare Advantage Client: Hospital Indemnity Plans

How to start the conversation

Before we get into the product knowledge bit of things, it’s important to know how to effortlessly start up the conversation with your client.

Keep in mind that HI plans are ideal for people under 65, but they can also work well for people who haven’t retired yet and are still on their group plan. The indemnity plan will provide a great benefit that covers out-of-pocket expenses.

If your client fits into the category of someone who has out of pocket medical expenses, start up the conversation with a question like:

  • Do you have a hospital co-pay or deductible?
  • Do you have money set aside for out-of-pocket costs?

It’s worth noting here that a lot of people with MA plans don’t realize they have deductibles and co-pays.

Even if their agent told them, most people forget what they learned in a matter of minutes. Plus, it takes constant repetition to actually instill an idea or concept into someone’s brain.

It’s no wonder Medicare has been sending emails nearly every week for months to enrollees about the new Medicare cards...

Hospital Indemnity Flex – 2 Base Benefit Options

The Hospital Indemnity Flex plan has base benefits, but there are 2 options. The first is a lump sum version, and the second – which is new – is a daily amount version. This new option can actually lower the premium for the consumer if they feel it’s a good fit.

Here’s how the 2 options compare:

Option 1: Hospital admission indemnity Option 2: Daily hospital indemnity
Lump sum version Daily amount version
Covers hospital confinement and observation stays Covers hospital confinement and observation stays (observation stays under 24 hours are paid at a 50% benefit)
Available in $250 units, up to $2,500 Available in $10 units up to $700 daily max
Payable once for each new “period of care” Payable once for each new “period of care”

A period of care begins the first day of confinement in a hospital due to a covered injury or illness. It ends when the policyholder has been out of the hospital or skilled nursing facility and does not require medical care for 60 continuous days.

Basically, you can reuse the policy as many times as you need as long as there are 60 days (2 months) between each period of care.

Optional Benefits (Riders)

Beyond the base benefit, you can add additional benefits, called riders.

We’ll go through those in detail, but first, here are the add-on options:

  • Daily skilled nursing facility
  • Doctor’s office visits
  • Outpatient surgical procedure
  • Hospital ER visit or ambulance
  • Lump sum cancer
  • Outpatient rehab

The following charts go through what the benefits are for each available rider.

Daily Skilled Nursing Facility Doctor’s Office Visit
Pays for each day of skilled care ordered by a doctor, following a hospital confinement of at least 3 consecutive days Available in $10 units up to $60 per visit
Available in $10 increments up to $200 per day Up to 20 visits per calendar year
Choice of covered days are 1-20, 21-100, or 1-100  

A lot of people like the doctor’s office visit rider, because they feel like they constantly get use of this policy, rather than just waiting for something to happen.

Outpatient Surgical Procedure Hospital ER Visit or Ambulance
Pays for outpatient surgical procedure performed at an ambulatory surgical center or outpatient surgical facility for covered illness or injury Must be medically necessary and on an emergency basis
Available in $250 increments up to $1,500 per procedure, 1 time per year Pays up to $200 per visit/service, up to 2 times per calendar year

Lump Sum Cancer Outpatient Rehab
Pays for a lump sum amount for the first occurrence of medically diagnosed cancer Pays a daily amount for treatment of a covered illness or injury with these outpatient therapies: occupational, physical, or speech
Can choose $2,500; $5,000; or $10,000 Available for 15 or 30 visits per year, $50 per visit

The $10,000 cancer benefit is the most popular, and people like it because it’s packaged into this policy – not a separate cancer policy. Multiple policies can be a big turn-off for consumers as it adds to the confusion of the entire insurance process.

If someone has a stroke or they need physical or speech therapy, the outpatient rehab can really help out.

If their insurance plan picks up the costs for any of these riders, that’s OK. The policyholder still gets paid the benefits from this plan – they can just pocket that money and use it as they see fit.


What ages can purchase this policy?

18-89. That’s why it’s great for those on major medical plans (under 65) and those on Medicare Advantage.

Is this policy guaranteed renewable?


Are benefits paid directly to the policyholder?

Yes, unless they are assigned to a healthcare provider.

Do premiums increase because of age or health?



The underwriting is a bit simpler than Medicare Supplements. It’s just yes/no underwriting. Just read the underwriting yes/no questions and take a look at the drug list. That’s really all you need to do is to make sure your client is insurable.

You can always just reach out to the underwriters if you have a specific underwriting question.


Have any questions? Leave a comment below or start up a chat using the chat tool on the bottom right side of the screen.

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