Hospital insurance is often mistakenly referred to as a hospital plan. A hospital plan is a medical aid plan that only covers the insured for hospitalisation. Day-to-day medical expenses such as chronic medications, doctor visits and other medical treatments are not covered by these plans. Ideally suited for younger people without families, hospital plans are generally the cheapest options available. Within the hospital plan group of products available on the market, there are also many different levels of cover to accommodate every need and budget. Some have annual benefit caps whereas others don't. Once the entire annual benefit has been utilised, the insured would have to cover the rest of his or her hospital expenses personally. Hospital insurance on the other hand is like most forms of insurance. If the owner of the policy requires hospitalisation while covered, then the policy pays out a sum of money either daily or as a lump sum. The money paid out does not necessarily have to be used to cover medical bills.