Hospital Indemnity Insurance This insurance offers limited coverage. It pays a fixed amount for each day, up to a maximum number of days. You may use it for medical or other expenses. Usually, the amount you receive will be less than the cost of a hospital stay. Some hospital indemnity policies will pay the specified daily amount even if you have other health insurance. Others may coordinate benefits, so that the money you receive does not equal more than 100 percent of the hospital bill.