Budgeting for healthcare

Everyday health costs soon add up. Those six-monthly visits to the dentist can soon burn a hole in your wallet, while getting new glasses or lenses is also an expensive burden many of us have to bear on a regular basis.

One way to help budget for such everyday health costs, plus a range of complementary treatments, such as physiotherapy or osteopathy, is through a healthcare cash plan. For as little as £2 a week, a cash plan will provide a set lump sum (usually with annual limits) to help you meet such day-to-day health bills.

Unlike PMI, there's no need to disclose anything about your medical history. However, most providers have a cut-off age for starting a new policy - usually 60 or 65 - and the policy must be in place for three to six months before you can make your first claim.

Premiums are set at a standard rate and are unaffected by how many times you claim as they are based purely on the level of benefits you opt for.

In addition to the key benefits already mentioned, most plans offer cash back on a range of alternative therapies such as acupuncture and homeopathy, as well as other consultations, such as allergy tests or health screenings and x-rays.

Plans can also provide lump sum payments on the birth of children and you can often claim cash back if you are admitted into hospital overnight.

Broad range of providers

As well as insurance companies, plans tend to be provided by friendly societies or not-for-profit organisations. Some of the biggest providers include HSA, Westfield Health, Medicash, BUPA and Healthsure.

Although most plans provide benefits covering the same type of treatments, the level of benefits you get for the price you pay varies and can be quite difficult to compare.

Some benefits will provide the full cost of treatment up to a certain limit; others will refund a percentage of treatment costs (usually 50% or 75%). Some providers quote weekly premiums, while others quote monthly ones.

All providers offer three or four different levels of cover, and whether you opt for the cheapest or the most expensive depends on how much cover you require.

Cash plans often appeal to families as they can be a useful way to budget. You can also often claim
discounts if more than one adult is named on a policy and children are often provided benefits for free.

So while cash plans are no replacement for PMI, they can be a helpful and affordable way to finance everyday health costs.