When a night is not a night
[OPINION] A short while ago, I wrote about an insurer’s disability product policy wording requiring that the insurer be notified if the life insured’s occupation changes. Something not mandatory with other mainstream providers as far as I can tell.
Monday, May 4th 2026, 6:08PM 
3 Comments
by Steve Wright
So, I decided to keep an eye out for unexpected and unusual policy provisions that advisers should be aware of, and this one, while not so critical, is probably worth knowing about.
The product concerned is medical insurance and the benefit, Public Hospital Cash Benefit.
This is a useful benefit for clients admitted to a public hospital for some time and which typically pays $300 for each night spent in a public hospital after the third night.
One of the providers has decided that a ‘night’ now means… ‘…24 hours, starting from the time of admission.’
This seemingly creates the unexpected possibility that four full nights (dusk to dawn) spent in hospital may only be counted as three nights according to the policy wording.
For example, a client admitted to hospital at 4pm on a Monday, who spends four nights in hospital and is then discharged at 10 am on the following Friday would probably be expecting to be paid for one night under the benefit.
However, although they have spent four nights in hospital in reality, according to the policy wording, they have only spent three nights in hospital. (Because they have been admitted for 42 hours, not the full (4 x 24 hours) 48 hours presumably required to equal four nights as required in the policy wording.)
Now the insurer concerned may say they will pay the $300 for the fourth night in a situation like this, but such payment would still be ‘ex gratia’; the policy wording giving them the right not to do so.
Steve Wright has qualifications in economics, law, tax, and financial planning. He has spent the last 20 years in sales, product, and professional development roles with insurers. He is now independent and helping advisers mitigate advice risk through training and advice coaching.
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Comments from our readers
My experience with this has been mixed, with some insurers considering discharge and readmission to be the same admission paying a contiguous claim. With others being a bit pedantic.
Given my knowledge and history with product changes, I can only conclude that someone has complained about the definition(s) which have driven changes tightening the response.
End of the day the insurers are under pressure with claims, and we have seen this benefit removed with Southern Cross and moved into an optional area with Partners Life. So it's no longer a given there will be a response from policies for this either.
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