Medical Expense✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A hospital confinement indemnity policy generally pays:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
A hospital confinement indemnity policy pays a stated fixed dollar amount for each day the insured is confined to a hospital, without regard to the actual charges incurred. It is a limited benefit policy designed to supplement other coverage or help with incidental expenses. Because payment is not tied to actual medical costs, these policies typically have lower premiums and may be subject to pre-existing condition exclusions under the rules applicable to limited benefit products.
Why the other options are wrong
- A) Paying all hospital charges above a deductible describes major medical expense insurance, which reimburses actual covered expenses.
- B) Replacing lost wages is the function of disability income insurance, not a hospital indemnity policy.
- C) Covering the full cost of outpatient surgery is a feature of comprehensive medical expense coverage, not a per-day indemnity benefit.
Memory hook
Indemnity = a flat per-day check while hospitalized, no receipt required. The bill itself is someone else's problem.