Rebecca and Tony | Edited by Johanna
Updated April 2016
Worried about paying for dental, optical or physio treatment? You can get cheap cover with a healthcare cash plan, possibly saving £100s, and some even pay out more than you pay in.
In this guide we explain how healthcare cash plans - which replay what you've shelled out for treatment - work, how to find the best schemes and what to watch out for before you buy.
Healthcare cash plans best buys
Healthcare cash plans explained: The 9 need-to-knows
Healthcare cash plans are insurance policies that instead of covering you for unforseen, unpredictable events like most other types of insurance, help you pay for the cost of routine healthcare.
Appointments such as going for a dental check-up, getting your glasses from the optician, physiotherapy and sometimes even massages can be included.
They're totally different to private medical insurance and can be a cheap way of paying for everyday healthcare costs. Though many people don’t understand how they work. Here are nine need-to-knows to help you decide if they're worth it and where to find the best cover at an affordable rate.
Even with the NHS it’s difficult not to spend money on healthcare; there are dental treatments, optical check-ups, alternative therapies and more. Yet, used correctly healthcare cash plans allow you to recover these costs and can pay you back up to six times what you spend on them each year.
You pay a monthly premium, depending on how much cover you want, and when you receive treatment, you pay upfront and then send the receipt to the insurer and it reimburses you.
If you chose a plan with £200 dental cover, for example, you can then claim up to £200 back per year on dental treatments – so a check-up costing £20, a £130 filling, and a £50 visit to the hygienist would all be covered.
There's usually no medical so they're great for those who aren't in tip top condition and can cover anyone up to the age of 99. Plus, you'll pay a flat-rate up to the age of 65 so whether you're 25 or 45 you'll pay the same for the same level of cover.
What do healthcare cash plans typically cover?
Healthcare cash plans cover a number of different treatments. Here are some of the most common, but check your policy for the full rundown.
Dentist: Both checkups and dental treatments, including seeing the hygienist.
Optician: Eye tests and prescription glasses or contact lenses. Some providers exclude disposable contact lenses (see Cheap Contact Lenses).
Chiropody: Foot treatment and advice.
Physiotherapy: Sometimes coupled with osteopathy.
Maternity payments: Cash, paid when a child is born.
Complementary health: Osteopathy, chiropractic, homeopathy and acupuncture by a registered practitioner.
Hospital inpatient: Cash paid for each night spent in hospital.
Hospital parental stay: Cash paid when a parent spends the night in hospital with an ill child.
Special consultation: Repayment of fees paid towards a consultant physician or surgeon.
Personal accident, death and funeral benefits: Cash paid out in the event of accident or death.
NHS prescriptions: Cash back on the cost of a limited number of prescriptions (not commonly included).
Health screening: Schemes will pay for an annual health screening.
Others: Surgical or hearing aids, redundancy payouts, mental health payouts, day surgery, recuperation grants, occupational therapy, diet advice, paternity grants, adoption grants, infertility grants. Many providers also have help-lines for a range of subjects.
When can you make a claim?
Like health insurance policies, many healthcare cash plan schemes have qualifying periods when you can't claim anything.
This can be anything from one to six months and stops people joining and immediately getting treatment, claiming the money back and then cancelling the policy.
Maternity claims need at least 10 months, for obvious reasons.
When does a cash plan pay out?
Whatever the policy, most claims are processed very quickly and should take two to three days. Once you've sent the receipts to the provider and it's verified your claim, you can get it paid as a cheque or directly into your bank account usually within a few days.
Are pre-existing conditions covered?
If you have a pre-existing condition it'll be harder to find cover as most standard individual cash plans don't cover them. However, depending on the condition this doesn't mean you can't get cover – a shoulder injury, for example, wouldn't stop someone claiming for physiotherapy treatment for a knee injury.
You may have more luck via a company scheme as they are more likely to include pre-existing conditions so always double check the small print before you buy.
Does the cost vary with age?
Unlike other areas of insurance, when you buy a cash plan there's typically one flat-fee which everyone pays. This means someone aged 25 and someone aged 55 would pay the same.
If you're older or have ill health you may choose a plan with a higher limit, which will be more expensive, so always check that the policy you're buying covers what you need.
Some plans push up the price for those over the age of 65, or exclude them altogether, because those in this age group are likely to need more treatment. We've separated these out in our best buys below.
Is my money protected?
All healthcare cash plans are covered by the Financial Services Compensation Scheme, meaning 90% of what you put into a scheme is protected. But the FSCS will try to find another insurer to cover you if your current provider goes bust.
How do I buy a policy?
Will I need a medical?
Most healthcare cash plans don't require a medical. This is a boon, however if you have a pre-existing condition it should be declared. Some policies will exclude all future claims on any past conditions, yet most only exclude conditions suffered in the previous two years.
If you're aged over 65 you may need to provide one so always check the policy wording before you sign up.
What's the difference between cash plans and private medical insurance?
It’s important not to confuse cash plans with private medical insurance policies which are much more expensive and do a very different job. With PMI policies, if you get ill or have a medical problem then you automatically get private treatment paid for you (see our Cheapest Private Medical Insurance guide).
Healthcare cash plan schemes don’t sort out treatment for you, you simply get any treatments yourself, whether private or NHS, and if it costs you you can reclaim some of the cost back. They also tend to cover a much wider range of treatments.
There are lots of plans available so don't assume they’re all the same. When choosing a cash plan it's important to pick one that's right for you – otherwise it's just a waste of money.
If you have perfect vision, you're not going to need a huge allowance for optical cover and similarly if your teeth are still pearly white then you won't need a policy with a big allowance for dental.
Cash plans are a popular staff perk so before you buy one check whether your employer already provides the cover for free, or for a small amount each month.
If your employer does pay for your cash plan, they're not entirely free as although you won't pay for the plan, you'll pay the tax on it. So, if it costs £20 per month, and you're on a tax rate of 20%, that's £4 per month which you'll have to pay for.
This is because the cash plan is a perk paid by your employer and known as a 'benefit in kind'. However, paying the tax – and not paying the full amount for the cash plan yourself – is clearly a much cheaper option.
As mentioned above, you need to pick a healthcare cash plan that meets your needs but it's also important to make sure you're getting the maximum cash payout from your plan.
For example, let's take a plan that costs £240 per year that includes £300 for optical costs and £300 for dental:
- If you've maxed out both you'd be paid £600. Take away what you've put in and you're £360 up at the end of the year.
- However, if you don't use the optical part and only £50 of dental – say two check-ups per year – you'd only get £50 from the plan and compared to the amount you've paid in (£240) you're now £190 out of pocket.
Therefore before you pick a policy, always check what you're likely to use compared to how much you'll be paying each month. Our best buys below have full details.
Just because people can claim for the cost of healthcare through a cash plan, doesn't mean they do. Many people forget to send in their claim forms, so there's no payout at all.
Cash plan providers rely on apathetic customers with direct debits dripping from their bank accounts to keep the coffers healthy. So this is OUR CLARION CALL...
Cash plans are only great value if you'll make claims. If you won't, it's like throwing money down the drain.
If you're young and healthy (say you've got 20:20 vision and not a single filling in your mouth), a healthcare cash plan might not be for you. Self-insuring may be a better option. Instead of paying, say, £300 a year for a cash plan, pay £25 a month into a high-interest savings account or into an interest-paying current account.
Should you need any minor treatment or consultations, simply dip into your own insurance fund. If you don't touch it you'll get to keep your 'premiums' with the interest on top.
You can cover an individual or two adults on a policy and most policies then let you add children at no extra cost.
If you’ve added children to your policy, it effectively makes it a family plan. The children on the policy then either get their own allowance per child, have a shared allowance between children or share the adult allowance.
For example, each child may get £100 towards dental costs per year, all children on the policy may have a shared allowance of £300 for dental – or each parent has a limit of £500 per year for dental which the children can also use.
In addition, some policies won't protect children for certain things. Make sure you know what your family's needs are, then make sure the policy you're interested in matches up. And remember – as most children's treatments are free on the NHS the amount of cash you can reclaim is limited.
How many children can be added to a plan?
How many children you can include on your cash plan depends on the insurer and the plan you've chosen.
Most policies let you add up to five children and you'll either get a seperate allowance for each child to use which is usually lower than the adult allowance, children will share the overall family allowance, or they'll be given an amount of cash to share between children.
Along with optical, dental and physio there may be complementary treatments included in your cash plan. This could be anything from an aromatherapy massage for stress, cosmetic tooth whitening or a medical pedicure. If yours includes these, and it's something you usually pay out for, make sure you're using the cash plan instead.
For example, if you choose a level one plan with Health Shield for £10.60 per month you'd get £65 per year towards what's called 'health and well being' which includes an aromatherapy massage.
On top of this you'd also get £125 towards 'physiotherapy, chiropractic, osteopathy, acupuncture and homoeopathy'.
When you sign up to a cash plan you'll be given an allowance of money per policy year to claim back to pay for your routine healthcare costs. This is a 'use it or lose it' policy so at the end you won't be able to access it anymore.
Therefore it's important to take note of when the policy comes to an end so you can make sure you've used up all the cash available. If it ends in June, for example, check your existing cash allowance in April and if you've still got money to claim on dental, for example, book an appointment and claim back the cash.
Cash plans have different prices, cover and limits, so they're a nightmare to compare. To help we've based our best buys on a variety of scenarios.
We've analysed policies and worked out our best by those which pay back the most compared to how much they cost. To pick the top we've divided the total amount you can claim per year with how much you'll pay out per year and given it a score. For example, a policy that pays out £300 and costs £100 a year would score a 3.
As each provider has a range of tariffs, for a single adult its nearest tariff to £20 a month was used and unless stated the upper age limit is 65.
Our cheapest adult policies
These basic policies for individuals focus on cheap plans so if you forget to claim the loss is small, but it does mean the potential payback is reduced. If it works, but you want more cover, you can always increase the plan level.
|Top cheapest policies|
|Company||Plan name||Cost||Annual payout||No-claim period|
|WHA||Personal 145||£6.30/mth (1)||£260||3 months|
|WPA||Level One||£8.40/mth (1)||£270||1 month|
|BHSF||Value Plan (age 17-34)||£10/mth (2)||£310||13 weeks|
Note: Claim amount: at least £50 towards each of dental, optical and physio treatment. The price level is up to £10 a month per adult. Correct as of September 2015. (1) It pays out between 75% and 100% of each claim, you could have to pay the extra 25%. (2) It pays out 50% of each physio claim, and between 75% and 100% for dental and optical.
These policies are a step up from our basic top picks. As you're getting a better level of cover, the price is more and as always, the aim is to find a policy with a range of cover and a good payout rate. The policies listed as best value meet a minimum criteria of; £125 for dental, £125 for optical and £200 for physio. If you go for a cheaper policy, like those above, you won't be able to get the same level of cover.
|Top value policies for an individual|
|Company||Plan name||Cost||Annual payout||No-claim period|
|WHA||Personal 325||£14.10/mth (1)||£560||3 months|
|WHA||Personal 235||£10.20/mth (1)||£400||3 months|
|WPA||Level Three||£17.77/mth (1)||£650||1 month|
|Note: Claim amount: at least £125 towards each of dental, £125 for optical and £200 for physio treatment. The price level is up to £20 a month per adult. Correct as of September 2015. (1) It pays out 75% of each claim, you could have to pay the extra 25%.|
As each provider has a range of tariffs, for a family (two adults and two kids) a policy of up to £40 was used and unless stated the upper age limit is 65. With all policies, always remember to check the cover levels suit your needs before buying.
As you're covering two adults and two children the price for these plans is higher along with the amount you could be paid back. The aim is still to find a policy with a range of cover and a good payout rate.
|Top value family policies|
|Company||Plan name||Cost||Annual payout (entire family)||No-claim period|
|WPA||Level 3 (1)||£35.54/mth||£2,150||1 month|
|HSF||Scheme 5||£36.50/mth||£2,060||3 months|
|HSF||Scheme 4||£29.50/mth||£1,632||3 months|
|Note: Claim amount: at least £125 towards each of dental, £125 for optical and £200 for physio treatment. The price level was up to £40 a month per plan. Correct as of September 2015. (1) It pays out 75% of each claim, you could have to pay the extra 25%.|
Most of the top-paying healthcare cash plans have a maximum joining age of 64, but if you're older there are still plenty of options as you can see from the best buys below.
|Top policies for over 65s|
|Company||Plan name||Cost||Annual payout||No-claim period|
|HSF||Scheme 5 (up to age 70)||£36.50||£1,130||0 months|
|Aviva||Health Cash Plan (up to age 99)||
|HSF||Scheme 4 (up to age 70)||£29.50||£890||0 months|
|Note: Claim amount: at least £125 towards each of dental, £125 for optical and £200 for physio treatment. Correct as of September 2015|
If your cash plan provider rejects your claim and you think it has done so wrongly, do not take it lying down. First complain to it directly then if you don't get a response within eight weeks, complain to the free Financial Ombudsman.
The ombudsman is an independent adjudicator that will make the final decision on a claim if you are locked in a dispute with your insurer. For more on how to make a complaint, read our Financial Rights guide.