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Guide to Hospital Cash Plans


Hospital cash plans are an increasingly popular form of medical insurance, generally regarded as being less comprehensive than private medical insurance and critical illness cover. Hospital cash plans are a relatively new form of insurance, but the market is already diverse, with various specialist and major health insurance companies offering a range of different products. The benefits and limitations of your hospital cash plan will depend on the cost and provider.

What is a hospital cash plan?

Hospital Cash Plans are designed to pay the policyholder a lump sum for each day he or she needs treatment as an in-patient in either an NHS or private hospital. This sum is tax-free. Depending on the type of policy and the level of cover, hospital cash plans can also include dental cover and other benefits.

Is a hospital cash plan the same as private medical insurance?

Hospital Cash Plans and health plans are not the same as private medical insurance or income protection insurance, and the payments provided by cash plans will not cover the cost of private medical treatment. Hospital cash plans are budget insurance products designed to help individuals and families with the costs of healthcare.

Are hospital cash plans suitable for families?

Hospital cash plans are often marketed as family products as opposed to individual ones. Bear in mind that children receive much free medical care on the NHS, and are very unlikely to need cover for many aspects of healthcare covered by hospital cash plans. Cash plans are simple, useful products that don’t cost the world, and in many cases they do suit families, so long as the policyholders recognise what they are for and their benefits and exclusions.

How much do hospital cash plans cost?

Hospital cash plans generally vary in cost depending on the level of cover. People looking for cash plan policies may wish to bear in mind that at their upper levels of expense, a private medical insurance product could be available for the same price, offering fewer restrictions and a greater level of cover.

Should I choose a hospital cash plan if I can’t afford private medical insurance?

In deciding whether to take out a hospital cash plan, would-be policyholders need to determine whether the level of cash cover provided by the policy is sufficient, and whether the benefits are necessary Understanding the ins and outs of hospital cash plans is integral to this.

For instance, many policies require six months or more before any type of benefit is available. Hospital cash plans generally exclude all forms of pre-existing condition or health complaint. Usually, hospital stays are very brief, meaning the actual benefit can be low. Often, also, payout levels have an upper cash limit meaning the level of benefit can be restricted. Being aware of the benefits and restrictions of each hospital cash plan allows policyholders to make a clear decision.

Health Insurance Partners