What is a hospital cash back plan?

Accidents and medical emergencies requiring hospitalisation are unpredictable in one’s life. Having the assurance that your medical bills are manageable through medical aid is of immense help.

However, being incapacitated with illness or injury does not stop your household bills from piling up. As these expenses are not medical aid and hospital plans, these expenses are an added burden to your loved ones.

The hospital cash back plan was thus designed to manage living expenses of the client during hospitalisation. Hospital cash back plans are designed for day to day expenses when you or your loved ones are hospitalised.

They are not medical aid but cash payments to stabilise your household finances while you recover. The idea is to help the individual with any extra costs and balance the income loss imposed through hospitalisation.

How It Works

Medical aid schemes in South Africa provide only healthcare assistance to the members. They do not include cash payments for everyday expenditures. Hospital cash back plans on the other hand cater to the income loss of the individual due to hospitalisation. There are various plans for hospital cash back schemes in the market.

You can choose the plan which pays the optimum cash back for your needs. The premiums will hinge on the plan you choose. Most hospital cash back plans have a minimum salary requirement to enter the programme.

This varies from company to company and you can choose a plan that fits your salary bracket. There is also a maximum age limit of 59 years to enrol in this policy. In case of a claim, the insurance company will reimburse you a predetermined sum of money for each day you spend in recovery.

Some insurance will have a requirement of 3 successive days of hospitalisation before a claim can be honoured. The payment for most cases is done after the proof of hospitalisation has been submitted. In rare cases, where the hospitalisation goes beyond 30 days, the claims are processed partially after 30 days for the said period.

The cash back plans also insure your partner and dependent children. Like most medical insurance schemes, there is a waiting period during which you would not be entitled to any benefits. This waiting period can be of 6 months to a year. The maximum amount of days you can be insured for is 180 days.

For most unutilised hospital cash back plans, the company pays out a percentage of your premiums after a fixed number of years. This could be anywhere from 3 to 5 years. This money may be paid out whether or not you required hospitalisation in those years, with some companies. In the case of hospitalisation or non-utilisation the payment is made in a lump sum amount.

It is evident that having a hospital cash back plan can be a great blessing. Your family and you can peacefully focus on recovery rather than worry about domestic finances.

You can cover yourself for as much as you potentially require in case of a crisis. It is in your interest to make sure that you are covering yourself adequately and are aware of the exclusions from your policy.

Most companies do not pay for certain conditions or accidents like accidents while being under the influence of alcohol. Being aware of the applicability and limitations of your policy is prudent.