Hospital Income Policy A Terrific Buy For My Family – How About Yours?

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. This is only a brief explanation of coverage. Modifications are applicable in some states. Coverages and programs discussed may or may not be available in your state.

Also know that I don’t work for State Farm any longer and am not being compensated in any way for this article. It’s just a good policy.

I love this policy. And them’s some strong feelings about an insurance policy. I promised you all I would tell you about it, so here it is.

I’m not sure if I’d have discovered this policy if I hadn’t been working for State Farm as an insurance agent. It’s not well publicized, but it can be a terrific part of anyone’s health insurance portfolio.

What is it?

If you’ve ever been hospitalized you know that there are expenses your primary health insurance just doesn’t cover. Additionally the inconvenience of simply being hospitalized means additional expenses for you and your family. Things like:

  • Deductibles and Co-insurance
  • Private Room and Private Duty Nursing Fees
  • Transportation
  • Child Care
  • Lawn & House Care
  • Meals Out
  • Pet Care

State Farm’s Hospital Income policy helps provide the money you’ll need to pay for those extra expenses when you’re hospitalized. It can offer you an ideal way to supplement your health insurance coverage.

If you are hospitalized for a covered injury or sickness (and really, there aren’t many exclusions) the policy pays the selected hospital income amount (mine’s $100/day*, but I wish I’d taken more!) for up to 365 days of confinement in a hospital.

One of the exclusions is for normal pregnancy and childbirth. However, complications of pregnancy and childbirth are covered. When I had Son I needed an emergency Cesarean Section, so my five day hospital stay was covered. Son had some minor complications so his stay was covered, too. He was automatically covered at birth as long as I added him to the policy (and paid the additional premium) within thirty days of his birth. It also covered his three day RSV induced hospital stay when he was 21 months old – the longest days of my life.

When Intensive Care is needed the policy pays an additional benefit equal to the hospital income amount not to exceed 14 days. So for me that means I get an additional $100 per day if I’m in ICU.

One of my former coworkers has a $200 per day policy. When her daughter was born six weeks prematurely she was in the pediatric intensive care unit for three weeks, then hospitalized another two. With her own hospital stay, her daughter’s hospital stay and the extra $200 per day she received for 14 of the 21 days her daughter was in intensive care my coworker received over five thousand dollars from her hospital income policy – enough so that she could stay home with her, unpaid, until her daughter was off a heart monitor and able to be placed in daycare so she could return to work.

Can you imagine the financial disaster she would have suffered if not for this spectacular little policy?

When Extended Care is needed the policy pays half the hospital income amount (so for me that would be $50 per day) for up to sixty days per calendar year while in a qualified Extended Care Facility. In most states extended care must begin within 14 days after at least a three day hospital confinement.

But that’s not all. And that’s not even my favorite part of the policy.

When you are injured accidentally the policy pays up to five times the hospital income amount (in my case up to $500) for x-rays or emergency first aid if received within 72 hours of the injury. If I have over $500 in emergency room or doctor costs, I get $500. If the bills are less than $500 I get whatever the bill amounts to.

I have used this portion of the policy many, many times. In the last ten years there have been at least three car accidents (none my fault!) that have ended in emergency room visits and one broken arm (on January 7th, so my $500 primary policy deductible had not yet been met). Each of those (and there may be more events I’m just not recalling right now) netted me $500.

There was also an incident, when Husband and I were trying to conceive Son, where I stepped wrong and broke a few toes. I wasn’t sure if it was just my toes or if my foot was broken, too, so I went to the ER (if I’m going to be in so much pain I may as well get paid for it!). I wouldn’t allow them to do X-rays (I could have been pregnant). The doctor assured me my foot wasn’t broken, taped my toes together and billed me $420. My primary insurance paid 90% (I’d met my yearly deductible, and my co-insurance was reduced because I went to an in-network hospital), so after paying my co-insurance I pocketed $378.

Isn’t that fab?

And if you have kids you know how often accidents happen. We’ve already collected from the policy twice for Son, including the incident last summer when he thought it would be fun to shove a rock up his nose. That sucker was wedged up there.

And there’s more.

When outpatient surgery is needed the policy pays the hospital income amount ($100 for me) for outpatient surgery not otherwise covered by outpatient benefits.

This is probably the part of the policy we’ve used most. Any outpatient surgery is covered. We’ve collected for all three of my colonoscopies and Husband’s one, his cardiac catheterization, three of my cyst removals, several mole removals, skin cancers. It even covers skin tag removal, which is so much of a nothing I’ve taken them off myself (isn’t aging sexy?).

So if I really needed some money one month I could, if I were so inclined, go to the dermatologist and pay my $25 co-payment, have her remove a skin tag or two and file a claim under my Hospital Income policy. I’d make $75 on the deal. And have fewer skin tags. Not that I’ve done that just because I’m short of money.

But I could.

Yes. I get paid to go to the doctor. Isn’t that smashing?

What else to like about this policy?

The benefits start from the first day of confinement. No waiting period!

The money is paid directly to you, unless you say otherwise. You decide how the money is spent. Use it to pay your deductible, you coinsurance or go on a trip to Tahiti. You decide!

The money isn’t taxable income. It’s insurance policy proceeds, so not counted as income (There may be some odd rule somewhere that I’ve never heard about that may make this taxable some minute fraction of the population, so please ask your tax advisor for a definitive answer. After all, if I wanted to know everything there was to know about taxes I’d have become an accountant like my father!).

Family coverage is available. You can cover just yourself, or add your spouse and kids. Remember that newborns are covered automatically as long as you notify the company and pay the premium.

It’s not expensive. We cover all three of us for about $280 for the year, and we’re oldish. The premiums will vary based on your age(s) and the policy amount chosen. I’ve not had a year yet that I didn’t collect more than I’ve paid. Of course if it was that way for everyone the company couldn’t offer it! Also know that the premiums can and do increase periodically as you age.

The policy is Guaranteed Renewable. Except in the event of fraud, material misrepresentation, nonpayment of premium, or expiration of the policy.

This policy is a great supplement to today’s high deductible plans, and also a great option for anyone with a HSA plan (State Farm also offers one of those). It should obviously not be your only coverage. If you have State Farm Auto and no other insurance with them you’ll also get a discount on your auto insurance for buying this policy.

You do have to medically qualify for the plan, and there are exclusions. The medical qualification is the only thing that keeps me from increasing our policy amount – with Husband’s diabetes and Son’s asthma we’d get denied. Dadgummit!

So call your local State Farm agent and get a quote. Even if you don’t have any other State Farm coverage. It’s definitely worth looking into.


29 Responses to “Hospital Income Policy A Terrific Buy For My Family – How About Yours?”

  1. Funny about Money Says:

    Wow! Thanks for the post about this…I hadn’t heard of such a policy before. So…it will supplement healthcare insurance that you have through your workplace, right? You don’t have to have your own policy through State Farm?

    With my employer’s insurance, you have to pay the ER deductible if you’re not admitted to the hospital for a period of at least 24 hours after you show up there. When I had an emergency appendectomy, to my amazement I got gouged for the ER fee…I’d thought you didn’t pay it if you went to the ER for a legitimate reason. Also, I’d been admitted mid-morning and stayed overnight, and I thought I’d been there at least 24 hours (felt like lots longer than that…). Nooo…. It was an hour or two short of a full day.

    Since then, on two occasions nurses at my doctor’s office have advised me to go to the ER for matters that arguably were not emergencies. Had I done so–even on the recommendation of my doctor–I would have had to pay the full freight for the ER visit, which as we know could quickly mount to over a thousand dollars. It would be nice to have back-up insurance that would allow you to get medical care when you need it promptly.

    • Jenni Says:

      I had no idea that outpatient surgeries or er visits from accidents were included. How far back can I go to file a claim?? Does anyone know

  2. BeThisWay Says:

    Right, FM. You don’t have to have a State Farm policy, and it pays in addition to what you have through work or on your own. There may be some rogue agents who choose not to write it if you don’t have another policy with them, but I honestly can’t see why they would…

    Our health policy through Husband’s employer this year began including a separate, special deductible for emergency room care, too. It’s not easy to keep track of the ins and outs of health insurance policies!!!

  3. Auto Insurance In CA Says:

    Is this only available through State Farm?

  4. BeThisWay Says:

    @Auto Insurance In CA – This particular policy, yes. Other companies offer similar policies.

  5. The 156th Carnival of Personal Finance: Songs of Summer | Prime Time Money Says:

    […] BeThisWay from Are You Going To Be This Way the Rest of the Time I Know You? presents Hospital Income Policy A Terrific Buy For My Family – How About Yours?. […]

  6. Lisa Says:

    I asked at my Allstate agent’s office, and Allstate has an accident policy but not a more generic hospital policy. But the one woman who works out front told me to go to State Farm for it, that she has it too and loves it. 😀

  7. There are easier ways to make $200… « Are You Going To Be This Way The Rest of The Time I Know You? Says:

    […] Well, remember the Hospital Income policy I told you about?  Yes, well, I get to put a claim in for my lovely day in the […]

  8. Priscilla Brown Says:

    I wanted to know. My husband was in a very bad car accident on Dec 2, 2009.He was in the hospital until January 5th. He has NO insurance what so ever. We did have full coverage car insurance but it only paid for $25,000 toward his medical bills that were up in the $300,000 range. I have had the Hospital Income for over a year now and State Farm & the Hospital are now telling me that my Hospital Income has to go towards his bill. IS THIS TRUE?? I thought it was to come directly to us. I never signed anything giving the hospital permission to use our Hospital income for the bill. If anyone knows the answer or the regulations or the law for this please let me know. I am desperate!!!!!

    • Tim Says:

      If you did not sign papers granting the hospital to be paid direct from state farm then state farm has to pay you direct.
      The hospital income policy is a supplement only policy and the hospital cannot force state farm to pay them without your permission.

  9. MB Says:

    Can you share some of the exclusions? What about minor complications during pregnancy, or closed head injury but discharged same day?

    • BeThisWay Says:

      MB, from what I recall pregnancy is not covered, but complications of pregnancy are. And you have to have a room-and-board charge to collect on the in-patient provision.

      I’d guess closed head injuries would be covered under the Emergency Accident Expense provision or the in-patient provision if applicable, but you’d have call a local agent for a list of exclusions and to get official answers to your questions. After all, I’m not a licensed insurance agent, and I don’t sell this policy. I’m just a customer.

  10. Florida Girl Says:

    I too worked for State Farm over a year ago and found the Hospital Income policy as well this way. I will NEVER get rid of it. I too have had moles removed – covered, colonoscopys – covered, hubby broke his colar bone – covered $1,800 because they x-rayed his colar bone (we paid $100 co-pay that day). I can’t stress enough how awesome this has been for our family. My son fell and had a head injury, his ped dr told us to go to hospital to make sure everything was all right, the ER did not do any ct scan or anything and because it was an accident SF paid us up to the max of the bill which was $900 that day. You don’t worry about minor surgery or accidents because this covers you. I strongly suggest looking into it! That is acctually how I discovered this site, I am getting my wisdom teeth out next month and was curious if my policy would cover it as a surgery. Good luck to all!

    • Aileen P Says:

      Hi, Did it cover your wisdom teeth finally? I had to have one pulled as an emergency visit and never thought that it would be covered by the policy…..

  11. Misty Says:

    I work for State Farm, and i’m glad to hear you rave about this fabulous policy. Not may know about it, and those who do…absolutely love it. It’s very inexpensive and worth every penny. The daily benefit is now anywhere from $200-$250. isn’t that great! i’d go on about all the other benefits to this policy but i believe the author of this post summed it all up.

    • SicklerGyrl Says:

      Well, someone REALLY screwed up and accidentally gave ma a Hospital Income Policy…I have Sickle Cell Anemia and just to put it this way… S.F. Has paid me over $35,000, since Jan 2010!!! I was just in the hospital for 28 days and am gonna get a check for over $11,000 by the end of this week. I didn’t want it at first but after being convinced to keep it. I know that the Lord himself wrote that policy for me!!! Get it , if you may need it and be blessed as well…The best thing that has EVER happened to me besides my Hubby and daughter…

  12. Gisse Says:

    Hi I have had this policy for over 10 years, I have used it a couple of times it’s great. I had a premature baby 2 years ago he was in the NICU for 5 weeks and I did not know that I could add him and could have collected on that. I wonder if I could still do it? I would pay the retroactive premiums they could deduct it from my claim if necessary. I wonder if that’s possible? It’s only fair no one told me I could add him and I’ve literally had this coverage for 10 yrs I don’t see why they wouldn’t. Any suggestions?

    • BeThisWay Says:

      Hello, Gisse,

      I really don’t think you could collect now for your son’s birth. The information about adding a child is in the policy, and (if I remember correctly) on every renewal notice. If your agent found out you had a child within that first 30 days (and I’m guessing s/he was not on your phone list to call after the birth), they would not necessarily make the leap to look to see if you had the HI policy, and if they did I’m sure they would recommend that the child be added.

      Insurance agents and staff generally do the best they can to keep their clients informed, but there is waaaaaaaaaay too much info in policies to be able to sit and tell every client every possible advantage and option they can take advantage of. That’s why it is up to us, as insureds, to read our policies and renewal notices and keep track of these things as best we can.

      You can certainly call your agent and ask, but I would not be at all surprised if the claim was denied. You can add the child now, and any future claims would be covered (I highly recommend it!). And you’ll certainly know for next time – though I hope that if there is a next time for you it’s an awesome and uneventful birth.

  13. Jonathan Says:

    I cannot express enough how important this policy is. If there is one thing I’ve learn is that this is 1 bill you never want to cut. I have a preemie he was in the NICU for 7wks and received over $18,000 with no hassle. I was so astonished I thought this was a cruel joke….but no joke at all and it certainly was not cruel. Just get the policy….don’t even think twice about it!!!!!!

  14. Sam Says:

    My family has had this policy for a couple years, and had to use it for the first time yesterday when my son was taken to the ER for stitches. Does anyone know about how long it takes to receive the check from State Farm after they have received all the proper documentations? Thanks for your help!!!

  15. cherry M Says:

    We have a policy that pays 500 for ER. My family was in ER after a car accident but they only pay 500. Are thay supposed to pay for the 3 of us instead of only 1?

    • BeThisWay Says:

      The policy only covers people named in the policy. If your family is not listed and you have not paying premiums for them, then you would not get to collect under the policy for them… It may be a good idea to add them now…

      • Johnnyull Says:

        Hi BeThisWay – I just saw your post from 2 weeks ago so it sounds like you really know this policy inside and out. I have a quick question/scenario for you and hoping you might be able to give me more details. My daughter is 3 yrs old and covered under my SF Hospital Income policy. In late March 2012 I had to bring her to the pediatric ER due to a swollen mass on her skin that was the size of a golf ball if not a little bigger. After running tests for a UTI, bladder infection etc., the ER doctor determined it was an insect sting or possibly a spider bite. Long and short of it, today I received a check for $250 even though the total ER bill was $404.35. It’s been right at 30 days from the date I faxed the claim form in to today in getting the check. But does that seem right to you, only $250 and not around $400 or so? It seems like the agent-lady who sold me this policy (which I got a 5% discount on my auto for multi lining) was misinformed b/c the main reason I bought this policy was she said it will be up to 3 times by daily benefit (which is $250) if a claim is due to an accident and an ER visit happens within 3 days of the first symptoms coming on. And my policy documents are vary vague and really don’t allude to this either. Any help or advice would be greatly appreciated.

      • BeThisWay Says:

        Sorry the reply is so late, but I do have an answer for you. The policy pays 5 times the daily limit you chose for emergency room visits resulting from an accidental injury. I’m guessing you have a $50 per day benefit, which explains the $250 payout. It never pays the entire bill – unless it totals under five times your daily limit. 🙂

  16. Stephanie Says:

    I love this policy which is why I got it when I lived in CT but when I transferred all my policies over to NH and I didn’t receive any paperwork on this particular policy I called up my new local office. The lady told me that wasn’t how it worked and I must have misunderstood or that CT policies must be different and I believed her. Needless to say I went into pre term labor in 08/2004 and went into the ER via ambulance and stayed inpatient for 5 days $$$$ then had a C section 10/2004 now several years later. I finally figured out that lady had no idea what she was talking about and all these yrs I paid into this and now it’s probably too late to receive the payment I deserved! I don’t even know where to begin….I was so mislead and now do upset that I could’ve used that money! My benefit amount was $250/day so I probably lost about $7k yay state farm 😦

  17. Dana C Says:

    I have had this policy for a number of years and have totally forgotten about it until recently. I love my agent because they informed me that I could go back 3 years and file claims on any qualified event, so I have and it has definitely come in handy at this time. Everyone I meet especially those with children in sports I strongly recommend they get this policy. If you can get it. It’s well worth it!!!

    • Jennk Says:

      I had no idea that outpatient surgeries or er visits from accidents were included. How far back can I go to file a claim?? Does anyone know

  18. Aileen P Says:

    Does anyone know if Wisdom Tooth Extraction is covered?

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