What are hospital cash plans vs. hospital plans?
It’s easy to confuse the two but they are actually very different forms of cover:
- A hospital cash back plan is a type of insurance where you’re paid out a daily cash amount (usually in a lump sum) should you spend time in hospital. This money is meant to compensate you for not being able to work and earn money while you’re in hospital, and the amount won’t necessarily cover all the costs of your medical treatment, leaving you with a large shortfall that you will have to fund yourself.
- In contrast, a hospital plan is a form of medical aid that covers the costs of in-hospital treatment you may need. Whether your hospital costs will be covered in full, or whether you’ll need to make a co-payment, will depend on the specific provider you’re with and the plan you’re on.
Hospital cash back plans usually only pay out from the fourth day you’re admitted to hospital. You can use this money for anything you want, whether it is affording grocery bills or paying for school fees.
On the other hand, hospital plans are one of the most basic, and essential forms of medical aid. Many people start out on a hospital plan when they are young, fit and single, and then move on to more comprehensive medical aid options as they get older and have more dependants.