MedEx has introduced an Income Replacement Plan that combines conventional income replacement with some of the benefits associated with healthcare cash plans.
For each working day that is lost through illness, disability or accident, the plan pays out one thirtieth of a person's monthly salary. The healthcare cash plan element of the product means that money can be claimed for broken bones, a hospital stay, loss of limbs or accidental death.
MedEx believes it can tap into a ready market of blue-collar workers and people who are self-employed, as these workers tend to take out healthcare cash plans rather than private medical insurance.
Income replacement plans are becoming more popular because the state no longer provides adequate financial help for people who cannot work through illness or accident. Even so, they are difficult to sell as people tend to think their ability to work will not be affected by illness.
In this context, the MedEx Income Replacement Plan is a reasonable product for a relatively small market. But its combination of hospital cash with income
replacement is unlikely to give customers much extra cash because hospital stays tend to be much shorter than they used to be.