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Last updated: 23/07/2020 | Estimated Reading Time: 3 minutes

Health care cash plans

Health care cash plans don't work in the same way as conventional insurance policies but instead act as a means to assist your payments towards routine healthcare costs. They operate by giving you a lump sum of cash that is then to be spent by you on covering the costs of things like dental appointments and optician visits.

The level of cover that you receive on these plans will vary from policy to policy so because of this it is important to be sure about what a plan has to offer before you sign up for it. Some plans will only cover you for routine dental appointments and other basic forms of medical care. Other plans will allow you to raise the cost of your premium in order to allow you cash aid for more specialist treatments such as physiotherapy or chiropody. There are even plans that will make contributions to things such as acupuncture, podiatry and homeopathy.

Most plans come with a limit on the total amount that you can claim back from the company so it is always a good idea to have a close look at your plan's fine print before you decide to commit to one. You should also try and work out how much you are likely to need each plan and see if that stacks up against the amount that you are willing to pay for the premium. Some plans can offer good value for money but others may result in you paying more for your premiums than you are ever likely to get back in the form of claims.

The monthly premium that you will pay for a health care cash plan can often be as small as £5, so if you can find one that offers the cover that you need for the right price that you are looking for, it could be a worthwhile endeavour. The claiming process works by sending a receipt of payment to you insurer once you have paid for the care that you needed and they will then pay you back in line with the amount that your policy covers you for.

For example if there are a set of spectacles that you require for £500, you then forward your proof of purchase to your provider. The amount that you will be paid back for these glasses will then depend in the intricacies of your policy. If your policy has an annual limit of £600, you will be reimbursed for the full total of your cash outlay. However if you are only allowed a yearly limit of £250, half of your bill will be paid.

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Healthcare cash plans - things to think about

One thing that you definitely make sure that you check before you go out and sign yourself up to one, is whether or not you already have some form of cover in place. If you have a health insurance plan in place already, then you may not need to fork out more money for a health care cash plan as you may already be covered. Health care cash plans are also quite popular amongst employers so it would be a good idea to see if you already have a plan in place with your company. Otherwise you may end up paying for a health care cash plan that you definitely don't need to be paying for.

You may also want to consider looking into health care cash plans that can be extended to your family members. These plans can be slightly more complicated because the amount that the company is willing to pay out may differ from family member to family member. For example some plans offer a high limit for adults but then only offer children a fraction of that same limit. This means that you should think long and hard about whether or not you will be receiving the level of cover that you want to be for all the family members involved as opposed to just adults.