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Critical Illness Insurance vs Hospital Indemnity Insurance: Which Should I Buy First?

What is Critical Illness Insurance?

Critical illness insurance is a form of supplemental insurance designed to help provide coverage for specific medical emergencies. Those who meet the criteria of a medical emergency outlined in the policy are paid a direct benefit to be used towards the cost of care.1 However, its benefits can also be used to help cover non-medical related expenses such as transportation, child care, groceries, and more.1 There are an array of critical illness insurance policies available with some policies being tailored towards specific illnesses and ailments. Some medical emergencies critical illness insurance helps cover include, but are not limited to:[1]

  • Heart attack

  • Stroke

  • Organ transplants

  • Cancer

  • Coronary bypass

In general, these policies are known for being relatively affordable.1 However, coverage limits can vary and be limited, resulting in fluctuating costs and coverage. Also, pre-existing conditions normally aren’t covered.2 As a result, it’s important to review your policy carefully and consult a licensed insurance agent with any questions you may have.

 

What is Hospital Indemnity Insurance?

Hospital indemnity insurance is a supplemental health insurance designed to help cover specific medical expenses, helping meet deductibles and co-pays.3 Generally speaking, hospital indemnity insurance policies pay a direct benefit to the beneficiary in the event hospital admission is required, and the visit meets the terms and conditions of the policy.3
 
A hospital indemnity insurance policy may include coverage on, but is not limited to the following:3

  • Hospital admission

  • Emergency room visit

  • Overnight stay

  • Outpatient procedures

  • Accidents

As you can see, due to the variety and versatility of hospital indemnity insurance policies on the market, it’s important to research different companies and policies before making a final decision. As a general rule, hospital indemnity insurance policies are seen as affordable, but depending on the policy and provider, some factors (such as age) may drastically increase the cost of premium payments.

In order to determine which policy you should buy first (or at all), you must first consider your own unique living situation and health.

What Should I Buy First?

Unfortunately, there is no universal answer to this question nor a one-size-fits-all approach that can (or should) be applied when answering it. In order to determine which policy you should buy first (or at all), you must first consider your own unique living situation and health. Are you at risk of heart disease, stroke, or cancer? Are you not at risk but want the added protection from major medical emergencies? Are you enrolled in contact sports? All of these are questions that should inform your decision over which policy to purchase, and purchase first. Only after careful consideration should you commit to purchasing any policy. For more guidance, speak with a licensed insurance agent.