Hospital Cash Insurance: Meaning, Key Features & Benefits

A good and adequate health insurance plan is necessary to protect your finances in the event of a medical emergency in your family leading to hospitalization. However, health insurance does not cover the additional expenses incurred during hospitalization, such as food and refreshments, attendant charges, etc. Moreover, hospitalization also often leads to loss of income which is not covered under a regular health plan.A hospital cash insurance can help you to compensate for such additional expenses. Read on to know what is hospital cash insurance and the benefits of having one.

It is a type of insurance policy that pays the insured person a fixed amount of money every day during hospitalization. This daily allowance can help the policyholder meet different miscellaneous expenses like nursing care, travelling to and from the hospital, etc.

• Family Floater One insurance plan can be used to cover the entire family up to 9 members. Children can draw benefits as dependents until they are 25 years of age.
• Hospital Cash Amount The daily cash amount can begin from Rs 1000 and go higher depending on your policy premium and other factors.
• Waiting Period Most plans come with a waiting period, usually 30 days. Illness contacted during this period is not covered. However, the waiting period may not be applicable if the policyholder is involved in an accident. In that case, the insurer will cover the treatment as usual.Furthermore, pre-existing diseases might have a different waiting period. Check the policy documents to know the specifics.

While one can't undermine health insurance benefits, hospital cash insurance comes with a different set of benefits, as mentioned below:

• Coverage of Non-Medical Expenses As mentioned earlier, policyholders can't claim a range of additional expenses like refreshments, comfort, etc., incurred during the hospitalization as they are usually non-medical expenses. However, they can pay these expenses through the daily cash amount received through hospital cash insurance plans.
• Less Documentation Since hospital cash insurance is not based on the reimbursement model, you don't need to provide various bills as proof of expenses. Instead, you only need to submit documents proving your hospitalization for the said period.Once you submit the hospitalization proof, you will be paid the lump sum cash amount without providing further expenditure proof.
• Protecting No-Claim Bonus on Your Health Insurance Health insurance offers a no-claim bonus to the insured for not filing claims for each number of claim-free years. Therefore, even a small claim can affect your no-claim bonus in the long run.However, you can use the hospital cash insurance amount to cover small hospitalization costs involving minor treatments. Thus, you won't need to claim benefits from your health insurance, keeping your no-claim bonus intact.
• Tax Benefits You can claim a tax benefit of up to Rs 25,000 under section 80D of income tax for the premium paid toward hospital cash insurance. Senior citizens can claim up to Rs 50,000 for the same.
• Enhanced ICU Benefits Some plans provide double the daily cash allowance if the policyholder is admitted to the ICU or hospitalized due to a road accident. The policyholder can avail of this additional benefit for up to 10 days of hospitalization every year.
• Special Coverage for Chronic Illness Many people have chronic illnesses such as asthma, diabetes, high blood pressure, high cholesterol, etc. Some reputed plans offer coverage for such chronic conditions as additional benefits.
• Automatic Upgrade for Chronic Illness After purchasing the policy, the insured can automatically upgrade to the chronic illness coverage programme without any additional premium if they develop any chronic conditions.Nobody can ever undermine the need for a health insurance plan. However, you need liquidity in times of medical emergency despite having adequate health coverage. Now that you are well aware of hospital cash insurance , do consider purchasing one to strengthen your overall health coverage.