Daily Hospital Cash Insurance Plan & Its Benefits

Financial advisors recommend individuals to include a health insurance policy as part of their financial portfolio. Such a policy offers the much-needed financial security in case of untoward events such as emergency hospitalization. The insurance provider is liable to pay the expenses incurred because of the hospitalization, thereby reducing the financial burden. You may, therefore, focus on receiving quality treatment instead of worrying about making financial arrangements.

The health insurance market is going through an innovative phase with insurance providers offering new and innovative products. A hospital cash plan is one such insurance product that is taking the insurance sector by storm.

Understanding Hospital Cash Insurance

In a hospital cash insurance policy, the insurer provides a fixed amount for each day until the policyholder is hospitalized. This amount is pre-determined at the time of purchase of the policy and is fixed.

It is important to note that the daily cash amount that you are eligible to receive does not depend on the actual hospitalization expenses incurred. For example, assume your daily hospital cash benefit is fixed at INR 1,000. This means that the insurance provider would pay a benefit of INR 1,000 for each day you are hospitalized, even if your hospitalization bill is higher or lower than this amount.

Benefits of a Daily Hospital Cash Policy

A hospital cash insurance policy is becoming a very popular option among the masses due to the numerous benefits it has to offer. Following are five major advantages of investing in such a policy.

1. To Cover Ancillary Costs

   Indemnity plans often come with certain exclusions. These exclusions are not covered as per the terms and conditions of the policy. A daily cash benefit helps meet such ancillary costs, thereby reducing your financial burden largely. The amount may be used to cover travel expenses for the visiting family members. You may also utilize the money to cover inadmissible hospital expenses such as bandages, needles, syringes, sterile injections, and band-aids, among many others. Besides, you may use the money to cover your household expenses. Since the insurance provider does not question the use of the money, you may utilize it in the manner you seem fit.

2. To Provide for Loss of Income

   While undergoing medical care you may lose your ability to perform office duties. In some cases, you may temporarily lose out on your regular source of income. The good news is that the daily hospital cash benefit amount acts as an income replacement, helping you meet your financial obligations such as children’s school fees, payment of loan installments, or lifestyle needs.

3. Acts as a Blanket Cover for Extra Hospital Bills

   There may be times where your existing health insurance policy may not provide adequate coverage to meet your hospital claim amount. During such times, a hospital cash insurance policy acts as a blanket to cover up any extra claim that you may face. You, therefore, need not make any out-of-pocket expenses to cover the balanced claim amount.

4. Preserves your No Claim Bonus (NCB)

   In an event that you are hospitalized for minor complications where the hospital bill is not too high, you may utilize your hospital cash benefit insurance instead of raising a claim in your health plan. This helps you preserve your NCB, thereby allowing you to enjoy discounted premium rates.

5. To Avail of Tax Benefits

   You may claim a tax deduction on the premium paid towards your daily insurance policy. Under Section 80D of the Income Tax Act, you may claim a tax benefit up to INR 25,000. Senior citizens may claim a higher amount of up to INR 50,000 according to Budget 2018. You may, therefore, avail of such tax benefits and reduce your income tax liability to a great extent.

   A hospital cash health insurance policy offers a plethora of benefits. You may, therefore, invest in such a plan and enjoy the numerous benefits it has to offer. You may purchase this plan as a standalone plan or along with your basic health insurance policy. Doing so will help reduce your financial burden during challenging times.