Family managing their finances on computer

How to Manage Financial Stress (and Why Hospital Indemnity Can Help)

Bana Jobe

Stress builds up over time causing muscle knots, headaches, irritability and anxiety. And what’s the thing that stresses Americans out the most—more than work, marriage and even health?

Financial worries are the biggest stressor for nearly 60 percent of people, according to PwC’s 2019 Employee Financial Wellness Survey. Unchecked, those concerns can lead to a series of physical and mental conditions. Some of them may land you in the hospital or out of a job, or both—all while the bills keep piling up.

That’s why the term “financial wellness” is increasingly a part of overall well-being, right alongside physical and mental health:

  • eat your veggies
  • get some exercise
  • practice self-care
  • manage your money

And yet, that last part is easier said than done. Money doesn’t grow on trees, so how do you get more of it when bills come due? Voluntary insurance, such as a Hospital Indemnity plan, can help. It gives you peace of mind (and extra cash) for life’s most stressful moments.

How Hospital Indemnity Insurance Works

Hospital Indemnity insurance pays out a cash benefit for designated hospitalization events, from basic overnight stays to more serious things like the intensive care unit (ICU).

Like with any other insurance, you pay a fixed monthly premium for these plans, and you can usually buy them for yourself, your spouse and your dependents. But at around $5 to $15 a month, the premiums are far less than a traditional health insurance premium—so you can fit them into your monthly budget. These types of plans don’t replace health insurance; they’re a companion benefit designed to go with them.

Every policy will have different lump-sum payouts that you’ll receive if you get hospitalized, such as $1,000 per day in the hospital. Plans can vary, you’ll want to check those amounts when shopping for Hospital Indemnity insurance. Depending on your employer’s available plans, you may get to pick different coverage levels to fit your budget:

  • Higher-premium plans with higher payouts
  • More affordable plans with lower payouts

Most importantly, those benefits come fast, within a few weeks or less. That means you’ll have cash in your bank account when money gets tight. You can then spend that cash on whatever you need or want to use it for, such as:

  • Hospital bills
  • Copays
  • Mortgage
  • Utilities
  • Prescriptions
  • Gas
  • And more…

Or, you can always save it, too. It’s your money, so it’s your choice what you do with it.

Hospital Indemnity and Stress Management

Having coverage that helps pay for unexpected medical issues is a good financial wellness practice, but you shouldn’t overlook the potential impact on your mental health as well.

Stress goes hand-in-hand with financial problems, and hospitalizations can cause a lot of them. A three-day hospital stay can average up to $30,000, and while traditional health insurance helps defray that cost, it may not cover everything.

Typically, people with health insurance have to meet their deductible first and then pay for copays and coinsurance until they reach their out-of-pocket limits. In 2020, those limits are as high as $8,150 for one person and $16,300 for a family.

And that’s if you stay in your health insurance plan’s network. If you intentionally or accidentally get out-of-network care (like if an out-of-network anesthesiologist gets assigned to your case), you could be on the hook for even higher costs. Balance billing, which happens when providers bill you for the balance of charges not paid by insurance, can also lead to medical debt and lingering financial stress.

Hospital Indemnity and Your Health

Okay, we’ve covered financial and mental wellness, but what about physical wellness? It turns out, the financial protection you get with a Hospital Indemnity plan can also help with that.

In part, that’s because of the unfortunate cycle of stress. Chronic stress can lead to unhealthy behaviors like poor eating or smoking. This can slow down your ability to heal and get back on a healthier path. Over time, this can put you in the hospital, which can lead to money problems and even more chronic stress.

Money problems can also have other effects on your health, like causing you to skip or delay needed hospital care because you’re afraid of the cost. According to a poll from Gallup, 1 in 4 Americans has said that either they or a family member have done so. Add the cash payout from a Hospital Indemnity plan to that equation, and the circumstances stand to change. It might even make those decisions easier if money isn’t as heavy of a factor.

And most importantly, financial stability gives you more time and opportunity to make better choices that impact other areas of your health—such as cooking nutritious meals at home or getting more exercise.

Above all, you don’t have to be rich to be financially well. But you do need to plan ahead.

But What Are the Odds?

Okay, you might think. So a hospitalization would cost a lot. But it’s not likely to happen to me. However, before you get too comfortable, you may want to reconsider. In fact, The Center for Disease Control (CDC) estimates that about 1 in 6 Americans get sick from a foodborne pathogen every year. Based off this, there are 128,000 who get hospitalized.

And these are among 36 million hospitalizations every year—mind you, that’s more than the entire population of Texas—roughly 30 percent of them are adults under 65, according to the Agency for Healthcare Research and Quality.

If you’re in that under-65 crowd, you probably still have to make ends meet. But hospitalization can put people out of work, even as everyday expenses come due. How do you keep the lights on when you’re unable to make money?

That’s exactly what Hospital Indemnity helps solve; it enables policyholders to affordably get financial protection against expected and unexpected hospitalizations.

Just imagine the relief of getting a lump-sum check to use immediately for a car payment, student loans or a light bill. Those extra funds may mean you don’t have to deplete your savings, which puts you in a better, less stressful financial position.

The Importance of a Plan

Keeping your finances under control is already stressful, but when you add medical bills and lasting debt from a hospital stay to the mix, it takes that stress to a whole new level. In time, stressors can spill over into other areas of your life, impacting relationships, kids—even your productivity at work.

Hospital Indemnity can help you ease the burden with extra protection against life’s unexpected events, but it won’t cure all your financial woes. You still have to get smart about your spending, and set goals and boundaries to keep your money on track.

Together, all these factors can support a healthy, vibrant financial picture—one that helps you strike the right balance between living for today and preparing for tomorrow. With financial wellness so entangled with overall wellness, it’s worth considering how you can keep your mind, body and money in tip-top shape.

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