Ashish is a 34-year-old corporate employee with a 28-year-old wife and a 5-year-old daughter. Ashish is a person who always plans his future ahead of time. Likewise, Ashish wanted his family to feel secure and free of any unfortunate expenses that might come by.
Meanwhile, Ashish’s company had provided a group health insurance policy of 10 lakhs covering him as well as his wife and kid. Unfortunately, he got diagnosed with gallbladder stones and had to get hospitalized. Luckily, the group health insurance policy managed to cover his expenses at the time of the treatment.
As an added benefit, his insurance company also provided him with a daily hospital cash benefit that covered all his miscellaneous hospitalization expenses. Using the daily hospital cash benefit, Ashish was able to meet the daily expenses that his family needed to sustain with utter comfort.
Clearly, these situations can cause a lot of turmoil and tension. But with the right planning, one can surpass such difficult times without having to turn their life upside down. Let us understand what daily hospital cash insurance is in detail.
What is daily hospital cash insurance?
A daily hospital cash insurance is nothing but a lump sum amount that the insurance company provides as a rider to your existing group health insurance policy or maybe a standalone cover. The insurance company provides a fixed amount each day to the employee during the time of the hospitalization. This lump sum amount is fixed in the starting while buying the daily hospital cash policy.
For instance, if your hospital daily cash policy provides Rs 1500 daily, then you will receive that amount irrespective of the expenses. For eg: whether your expense is Rs 1000 or Rs 2000, you will receive Rs 1500 as assured.
Read: 5 steps to get GMC for your team
Key features of hospital cash benefit
- Payout structure:
A hospital daily cash policy offers a fixed cash amount for each day of hospitalization, regardless of actual expenses incurred. In many cases, this payout increases often up to 2x during ICU stays, ensuring higher support during critical care. - Eligibility criteria:
To claim benefits under a daily hospital cash policy, hospitalization usually needs to last for a minimum of 24 hours. This ensures that the benefit is applicable for genuine inpatient treatments covered under group health insurance. - Coverage of non-medical expenses:
Unlike traditional group health insurance, which focuses on medical bills, a hospital cash benefit helps cover indirect costs such as food, travel, and accommodation for attendants expenses that are typically excluded from standard policies. - Day care procedure coverage:
Some hospital daily cash policies also extend coverage to select day care procedures that do not require 24-hour hospitalization, making the benefit more flexible and relevant for modern treatment methods. - Additional financial support:
This benefit acts as a financial buffer by helping policyholders manage deductibles, co-payments, or smaller claims that they may not want to file under their base group health insurance policy. - Flexible usage of funds:
The payout received under a daily hospital cash policy is not restricted to hospital bills and can be used for any purpose, including household expenses or temporary income loss during recovery. - Tax benefits:
If purchased as a standalone policy, the premium paid for a hospital daily cash policy may qualify for tax deductions under Section 80D of the Income Tax Act, subject to applicable conditions.
Benefits of daily hospital cash insurance
Some of the benefits of daily hospital cash allowance are:
Acts like a cushion for additional expenses
During hospitalization, certain expenses are exclusive of your group health insurance plan. These can include expenditures incurred by accompanying family members, voluntary medical procedures/tests, external durable items etc. While these services are not covered, the daily hospital cash insurance is what you can rely upon to clear those extra bills.
Covers loss of income
Naturally, one can possibly go through a loss of income in such tough times of hospitalization. The amount lost from unpaid leaves can be compensated during the period of hospitalization.
Can be used to cover household expenses
Loss of income again can create a huge barrier to maintaining household expenditures. The daily hospital cash allowance can be used to cover such unavoidable spending. For eg: meeting household expenses, tuition fees for children etc.
Preserves your no claim bonus(NCB)
Even a minor treatment can sometimes lead to hospitalization. However, the cost of treatment would be lower compared to major treatment. In such cases, you can use the daily hospital cash to pay off the bills rather than filing a claim for your insurance plan. This leads to preserving your no-claim bonus.
Read: TPA vs in-house claim settlement
Coverage provided under the hospital cash insurance
The hospital daily cash benefit is activated when the hospitalization becomes admissible. This amount is provided as a lump sum daily to the policyholder which can be used for various expenses. The daily hospital cash can be claimed once the required documents are submitted and the hospitalization becomes admissible.
Although an existing group health insurance policy covers most of the expenses, there are certain expenses that are excluded. Such expenses are called inadmissible expenses and include surgical accessories, X-Ray charges etc. For cases as such, a daily hospital cash plan kicks in without asking for any supporting bills. However, a 24 to 48 hours hospitalization bill is all that is required to avail of this benefit.
In special cases, hospitalization becomes inadmissible. In that case, the daily hospital cash benefit can become invalid. In short, the daily hospital cash benefit can be used to meet any additional expenses that are incurred and are not covered by your existing group health insurance cover.
Special case for ICU
Naturally, the expenses are higher when someone gets admitted to the ICU. In that case, the insured amount under daily hospital cash benefit gets doubled. For eg: if someone is insured with Rs 1500 in a regular room, the amount doubles to Rs 3000 in the case of ICU with a daily hospital cash insurance.
Coverage limit under the daily hospital cash plan
The amount from daily hospital cash benefit can range from Rs 100 to Rs 10,000 depending on what you buy. It is always suggested to check the policy clauses for the accurate amount that is insured.
In cases where the daily hospital cash allowance is inbuilt in the group health insurance policy, a certain percentage of the sum assured is considered for the same. For eg: if the group health insurance policy covers 10 lakhs, 1% of 10 lakhs i.e. Rs 10,000 might be allocated to a daily hospital cash benefit. However, it can vary in different insurance providers.
Also Read: Waiting Period in Health Insurance- What, Why and Types
For how long can a daily hospital cash cover be availed?
A daily hospital cash benefit can be availed for a total of 30 to 45 days of hospitalization. The number of days of availing the sum insured can change with different insurance company policies.
What is daily cash allowance in health insurance?
Daily cash allowance in health insurance refers to a fixed amount of money that an insured individual receives for each day they are hospitalized due to illness or injury. This allowance is provided to cover additional expenses incurred during the hospital stay, such as transportation, meals, and other incidentals that are not covered by the health insurance policy.
The daily cash allowance is typically a predetermined amount specified in the insurance policy, and it varies depending on the terms and conditions of the policy and the insurance provider. It is important to review the policy documents and understand the coverage limits and any exclusions or restrictions associated with the daily cash allowance.
Note that the daily cash allowance is different from the coverage for medical expenses incurred during hospitalization, which includes the cost of treatments, tests, and other healthcare services. Thus, the daily cash allowance is meant to provide additional financial support to policyholders to manage incidental expenses during their hospital stay.
Documents required to avail of daily hospital cash insurance benefit
The documents required to avail of daily hospital cash benefits are:
- Proof of hospitalization with a mention of the length of stay.
- A summary of discharge from the hospital. This proves the admissibility of the claim.
How can Pazcare help you?
Pazcare provides comprehensive healthcare benefits for your team. You can buy group health insurance, group personal accident insurance, group covid insurance, group term life insurance and customized corporate wellness programs.
With Pazcare, we can get you daily hospital cash insurance along with your group health insurance with ease. Moreover, to take care of all the grievances and queries from your employees, Pazcare has 24x7 customer support always waiting on the other side to help.
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