SHOULD I GET A ‘CASH PLAN’ AS WELL AS SOME CHEAP COVER?

Q

Last week you advised a reader on how he could reduce the costly age-loading on his health insurance premium by claiming for periods of past cover. Alas that option isn’t open to me as I have never been covered. I have a substantial age loading and I can’t afford to buy an advanced-level plan. But I want to improve my cover. Would getting a ‘cash plan’ in addition to a cheap health policy be a good idea?

A

Cash plans don’t offer insurance in the sense that they would pay huge hospital bills. They give you a cash sum for medical expenses, including hospital stays.

That’s a big difference. A heart procedure costing €20k would be fully covered by health insurance, but you might get €25 a day from your cash plan. However, if used carefully in conjunction with decent health insurance (see next question) these plans are a useful extra benefit and they are not that expensive. Your cash sum is paid on top of any other benefits you may claim from other insurers. They are not subject to age loading. So yes, it wouldn’t be a bad idea to get a mid-range health insurance plan and bump it up with cash plan cover.

Laya and VHI have their own ‘cash plans’. These mimic those of the Hospital Saturday Fund, a charitable organisation that pioneered these schemes as far back as 1873. There are many cash plans but let’s look at the three in the table below. The HSF is a bit stingy with cash back for GP visits at €8 each, which is possibly due to its UK origins where doctors’ bills aren’t quite so extravagant as they are here. But apart from that it seems to offer better cover for less money than the health insurers’ versions. It offers more extensive plans too. The number for HSF enquiries is 1890 473473.

Q

I am 34 and in good health. I want to take out health insurance to avoid age-loading later in life. Which is the best ‘cheap’ plan?

A

I asked Dermot Goode of Totalhealthcover.ie to recommend cheaper plans and he suggested these: VHI One Plan 250 - €916 Laya Essential Health 300 - €933 Irish Life Health Select Plus - €975

There are much cheaper plans. But he said: ‘We’re not in favour of plans below this as all you’re doing is taking on additional risk in the form of higher excesses - or no cover for private hospitals.’

Another disadvantage of the ‘cheaper’ plans is that you may be excluded from the ‘freebie’ benefits that can prove very valuable, such as GP care online.

I suggested to Dermot that wouldn’t it be better to pay another couple of hundred euro for a good mid-range plan that also provides cash back for routine medical expenses. He agreed. In this way, you could even end up paying less than you would with the above plans. Laya’s Simply Connect Plus, for example, provides 50% back on a range of expenses up to €1,000. All you have to do is claim for €300 and you could end up forking out less in the long run than you would for the plans listed above.