What Is a Hospital Cash Insurance Plan and Why You Should Consider One?

This was originally posted on Planner Bee.

Unexpected medical emergencies can put financial strain even on people with the most robust financial plans. This makes the need for supplementary coverage increasingly apparent in recent years.

As Singaporeans navigate the complexities of healthcare financing in our world-class healthcare system, it also raises one question: Is there a need for a Hospital Cash Insurance plan?

In this article, we will look at the reasons why this form of insurance is not just a prudent choice but also a vital component of comprehensive financial protection.

What is hospital cash insurance?

Hospital cash insurance policies offer policyholders daily cash benefits while warded, funds that can be used to offset any other expenses as you deem fit.

Such plans serve as a crucial financial safety net and provides individuals with additional protection against the financial burden arising from hospitalisation expenses.

But isn’t health insurance sufficient?

When it comes to health insurance, it typically only covers surgery and hospitalisation costs. While that usually pays the bulk of expenses, hospital stays can still incur significant out-of-pocket costs, especially if your health insurance does not cover deductibles and co-payments.

Hospital cash insurance plans then come into play by helping to offset miscellaneous fees such as transport to and fro the hospital during check-ups, deductibles and co-payments, or just about anything you need help paying.

This supplementary coverage helps the sick individual and their family maintain financial stability and peace of mind during challenging times, especially if the one injured or sick is the household breadwinner. This helps to ensure that they can focus on recovery without worrying about the financial implications of hospitalisation.

In essence, hospital cash insurance complements your existing health insurance coverage, providing an extra layer of financial security in the event of unforeseen medical emergencies.

Read more: Health Insurance in Singapore: All You Need To Know

How do I know which hospital cash policy is the right one for me?

In a marketplace brimming with options, selecting the right hospital cash policy can feel complex as one navigates different terms, coverage limits, and fine print.

While hospital cash policies have a few other benefits, the main reason for getting this is to give you extra cash when you are hospitalised.

Hospital cash insurance plans usually have three to four different tiers, offering anywhere from S$100 to S$600 for a 24-hour stay in the hospital due to injuries or illnesses.

To give you a better idea of how a hospital cash policy can differ, we will illustrate by comparing three different agencies’ policies: Great Eastern GREAT Hospital Cash, Income Hospital Care, and AIA Hospital Income.

In this scenario, Alex is a 32-year-old man who is considering getting a hospital cash insurance policy. He is keen on a S$200 payout per day should he be hospitalised in the event of an accident or injury.

If Alex is only concerned about the daily hospital cash benefit, Income’s Hospital Care plan at an annual premium of S$353.16 is best suited for him as it is the cheapest and gives him exactly what he needs. It is also a good plan if he travels overseas as it also offers S$200 per day of hospital cash benefit if Alex is away for no more than 90 days in a policy year.

Should Alex be concerned about the amount of lump sum cash he can get after his hospitalisation, then Great Eastern’s GREAT Hospital Cash will fit his needs more. At an annual premium of S$436.00, he will be presented with a lump sum of S$600 after three or more days of hospitalisation. If Alex undergoes a day surgery, he will receive S$200 as a get-well benefit.

AIA Hospital Income policy would be a good plan for Alex only if he is already insured with the AIA HealthShield Gold Max plan as he will receive a 20% discount. At a higher price tag of S$517.48, the plan is only slightly better in terms of the get-well benefit for day surgeries, paying out S$350 instead of Great Eastern’s S$200.

Read more: Debunking Myths About Integrated Shield Plans (IPs)

In conclusion…

With numerous insurance providers vying for attention and promising varying degrees of protection, picking the right hospital cash policy can be a headache for those new to insurance.

It is important to decide how much you are comfortable paying annually for this insurance and what are your non-negotiables when signing up for a plan like this.

Keep in mind that this insurance is to supplement your health insurance and never to replace it as the cash benefit alone will not be enough to pay for your surgery or the hospital stay. If you are curious about hospital cash insurance policies, feel free to drop us an email to learn more at [email protected] today!