Hospital Cash Insurance vs. Health Insurance: Key Differences
In terms of health and financial security while in the hospital, it is crucial to grasp the distinction between hospital cash insurance and health insurance. Both policies provide coverage for medical expenses but work in different ways. The following is a discussion of the fundamental contrasts between the two classes of insurance.
Hospital Cash Insurance: Daily Allowance
Hospital cash insurance gives a fixed amount of cash daily when the policyholder is hospitalized. This means that irrespective of what you spend on medical bills when in the hospital, you get a fixed amount per day you spend in the hospital. The payout is normally determined by a fixed number of days.
Key features of hospital cash insurance:
- Fixed daily allowance: is an important source of steady cash during hospitalization.
- No coverage for medical expenses: Does not bear the expense of treatment, medication, or surgery for an individual or the family.
- Supplementary to health insurance: Purchased together with health insurance, it aims to pay for the rest of the costs that may not be covered by hospital cash insurance.
Health Insurance: Comprehensive Coverage
It is the health insurance that pays for the real cost of health care during hospitalization such as investigations, treatment, fees, medicine, operation, and accommodation expenses. The coverage is normally up to a predetermined amount and may be characterized by deductibles or co-payments.
Key features of health insurance:
- Covers medical expenses: Reimburses the actual cost of treatment
- Policy limits and deductibles: Might cover only the listed diseases within the policy or treatments only or may forbid certain services that are to be paid out of the pocket. It will also have a waiting period for pre existing diseases.
- Comprehensive coverage: Provides a more extensive coverage for different medical requirements.
Key Differences: A Comparison Table
| Feature | Hospital Cash Insurance | Health Insurance |
| Coverage | Daily cash allowance | Medical expenses |
| Reimbursement | Fixed amount | Actual expenses (within limits) |
| Deductibles and co-payments | Generally none | May have deductibles and co-payments |
| Supplementary or standalone | Often supplementary | Can be standalone or supplementary |
When to Choose Which: A Guide
To be more precise, it may be more appropriate to describe the division between hospital cash insurance and health insurance as simply different plans depending on your individual needs.
- Desired level of coverage: However, if the individual has an intention of making a comprehensive payment for the medical expenses then health insurance is better suited for the task.
- Existing coverage: For individuals who already have health insurance, hospital cash insurance is very useful.
- Risk tolerance: Thus, if the applicant does not mind bearing the costs of out-of-pocket expenses for their hospitalization, hospital cash insurance is sufficient.
- Budget: Hospital cash insurance costs are low compared to the overall health insurance costs.
Conclusion
As we have discussed, both hospital cash insurance and health insurance have their own advantages. By appreciating the distinction in the two insurance policies, a person will be in a better position to decide which policy best suits his or her situation. This shows the importance of comparing your options for insurance based on the level of coverage you wish to have, the amount that you are willing to spend for the annual premium, and the amount of risk that you want to take in case you need to be hospitalized.
