A stay in hospital can cause great anxiety for you and your loved ones – especially if you are the primary breadwinner in your family. Both a hospital plan and hospital cash back will give you peace of mind and financial support when you most need it. But what is the difference between the two and which one is best for you and your family?
By taking careful note of the following information, and selecting the right type of hospital-related insurance for your needs, you will make sure that anxiety about finances won’t hamper your recovery during your hospital stay.
Hospital plans are a type of medical insurance that cover the costs of any stay in hospital, as long as you are admitted. They don’t cover visits to an emergency room or hospital-based clinic, as these don’t count as admissions, but do cover almost all the associated costs of a stay in hospital – including medication and specialist consultations.
Less expensive hospital cover may specify which hospital you must be treated at and may exclude certain procedures. The money is paid directly to the service providers, such as the hospital or relevant medical specialists, and you may still have to make a co-payment (when you are responsible for a surplus payment) for certain services or procedures.
Hospital cash back
A hospital cash back policy provides you with a certain amount of money for every day you spend in hospital. This is usually aimed at policyholders who will be treated in government hospitals and will suffer a loss of income for every day that they spend away from work. The daily cash back will cover the cost of the hospital stay as well as any costs that your family will incur in your absence (such as transport or groceries).
Some hospital cash back plans pay out a greater daily amount if you are in hospital because of an accident rather than an illness. Some offer a portion of your cash back if you don’t claim for a certain period. And some offer a lump sum pay-out if you become mentally or physically disabled. You can also insure other family members so that if you are unable to work while caring for them, your loss of income is still covered.
So how do you choose?
Generally speaking, the costs of private health care are prohibitive unless you have a hospital plan, but hospital plans are more costly than hospital cash back cover. Because of this, the choice is generally one of affordability.
If you are likely to receive affordable care in a government facility, it’s important to consider how your earnings will be affected by your absence from the workplace. Although any employer is obliged to give you six weeks of paid sick leave in any three-year cycle, many people aren’t full time workers and many employers don’t abide by the law, so it’s a good idea to have some kind of cover in place. Self-employed people and commission earners are other good candidates for hospital cash back cover.
Of course, as with any other type of insurance, you will need to weigh up the benefits of the plan against the cost of the cover and the likelihood of you needing it. Consider what your most pressing financial need would be if you were hospitalised, and make sure you get the right cover to address that needs, then add on benefits from that starting point.
Is it worth having both?
There is definitely a benefit to having both types of cover in place, because their purposes are quite different. A hospital plan will cover the medical costs of your hospital stay, whereas a hospital cash back plan will give you cash in your pocket to cover all the personal expenses and loss of income that you will incur during a hospitalisation.