Sunday, September 28, 2014

Hospital Stay Insurance Benefit - How it Works

Hospital. That smell, those beds, that food. Trust me, as a regular visitor to one, I know the drill. It sure isn't my favourite place in the world to visit. But if I was to get re-imbursed for it, that sure might make it a heck of a lot more tolerable. That's what we're talking about today, a benefit on your insurance that could result in just that.

If you have an Income Protection policy you likely already have this benefit (although it always pays to read the policy wording and check, because different providers and policies can vary). Basically, what it means is that if you suffer an illness or accident that necessitates a stay in hospital, you can claim on your hospital benefit. The benefit is designed to protect you whilst you're in hospital, aren't earning an income and possibly can't manage the bills such as your mortgage/car payments/rent etc.

The costs of a hospital stay on your life can be mitigated with Income Protection.

For instance, let's say Mike has a policy with a hospital stay benefit and suffers an illness which lands him in hospital for two weeks. The way the payout is usually calculated is that you will receive 1/30th of your agreed upon monthly income protection payout for each day you are in the hospital. Mike's monthly sum assured is $5,000. 1/30th of $5,000 is $166. That means Mike will receive $166 for each day of his hospital stay. Since Mike stayed two weeks, he is eligible for a total payout of $2,333.

We're trying to draw a bit of attention to this benefit, because recently we have had clients unaware of the fact that they were eligible for a claim on hospital benefit until we told them. So take a close look at your policy wordings and if you've had a hospital stay in the past, you might be eligible for some financial help.

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