The policy sold is referred to as a hospital indemnity policy. Each day you spend overnight in a hospital you are eligible to receive a payment from the insurance company. It pays benefits on top of whatever medical coverage you are already paying for. This is not meeting the true definition of insurance, covering a risk. This is more like playing on a rigged roulette wheel. It is virtually impossible to collect more money than you paid in.
Where is this big financial risk you are covering? If you have a $1,000 deductible on your homeowners policy or a $500 deductible on your car you are taking more of a risk. With these last two policies it is sure to cost you money when you file a claim. I have had over a dozen hospital stays, all with good medical insurance coverage. Never once have I had to pay over $100.00 for uncovered out of pocket expenses. Since I never bought a hospital indemnity insurance policy, I did not make extra money from my hospital stays.
The purpose of buying insurance is too deal with risks too high to cover on your own. With so many outpatient surgeries being performed, hospitalization is often avoided. Even when you do enter as an overnight patient, you and a lot of other patients will be leaving in one to 4 days. Although you may need rehabilitation, this is ordinarily provided outside the hospital itself. To me, when you buy a hospital indemnity policy you are cooking your own goose.
You buy a hospital indemnity policy that only costs $25.00 a month. It is conveniently deducted right from your paycheck. Lets say the policy pays $200 a day while you are overnight hospitalized, yet right now you are in good medical condition. Five years later you require a 2 day medical stay. The insurance company sends you a check for $400. This is rather silly if your regular medical plan covers all your bills. After 10 years, you would have paid in $3,000 and received $400 back. You lost $2,600.00.
Instead if the insurance salesperson had sold you a $25 a month annuity policy, you would have accumulated at least $3,000.00 plus the interest from the annuity. Using a very modest interest, your annuity policy should have accumulated to $4,400.00. If you would have paid yourself $400 for you hospital stay you would still have $4,000 in gain.
That $4,000 in gain could be used to pay car or homeowner deductibles, prescriptions, or even as savings for your retirement. The salesperson that sold you a hospital indemnity policy should get a good hard spank. The annuity salesperson should get thanks.
Your hospital indemnity salesperson who sold you the policy is probably no longer selling insurance. However, the annuity agent is probably still around, as this agent is selling clients what they need, not what seems easy to sell.
Well published author, Don Yerke likes to concentrate on what you don't know or what no one else dares to print. Tell it like it is. The website address is http://www.agentsinsurancemarketing.com - Check out over 100 captivating and stimulating articles.
