I’m confused about hospital indemnity insurance. I understand it’s meant to financially restore you after an incident, but here’s what I’m seeing: a $10/month payroll deduction provides $1,000 for one day in the hospital plus $100 for each additional day. I verified that the benefit is non-taxable and paid with post-tax dollars.
So, am I really paying $120 a year for the potential to get $1,000 with no tax implications? How does this work without hidden costs or tax effects?
I’m debating whether to increase my HSA contributions or invest in hospital indemnity. Any insights?