Hospital Cash
Hospital cash is a supplemental benefit that provides a fixed daily payment when you are hospitalized, regardless of the actual cost of your care. It offers financial support to cover incidental expenses such as transportation, meals for family members, or other non-medical costs during recovery.
How It Works
Hospital cash sits alongside your regular health insurance rather than replacing it, paying a lump-sum daily amount for each day you are confined in a hospital. The benefit is paid directly to you, not the hospital, so you keep full discretion over how to spend it. Because many group benefit plans and government health insurance do not cover all of the expenses tied to a hospital stay, this supplemental coverage helps offset the financial burden of extended hospitalization and the out-of-pocket, non-medical costs that come with it. In Canada, the daily benefit is typically tax-free, and some plans also add a lump-sum payment equal to the total value of the daily benefits received during the stay.
Example:
Picture a worker in Ontario covered under a Canada Life hospital cash add-on who is admitted to hospital after an accident. Their provincial OHIP plan and group benefits pay for the medical care and a standard ward, but the family is still left with parking, cafeteria meals, an in-room television, and babysitting costs. Since the add-on pays a fixed daily amount starting on the fourth day of confinement, the insured receives that cash directly and can put it toward those incidental, non-medical costs while recovering.
What to Watch For:
Hospital cash usually applies only after a minimum stay, such as 24 hours, and may exclude certain types of hospitalization like day surgery. Some Canadian plans also impose an elimination period, requiring hospitalization for a minimum number of consecutive days, such as three, before the daily benefit begins, and they cap coverage at a maximum number of covered days. Review these conditions so you understand when the benefit starts and how long it lasts.
