Understanding Hospital Daily Cash Plans

A health insurance policy safeguards the policyholder against exorbitant healthcare costs should he or she require hospitalisation due to a medical contingency. Apart from the hospital’s room rent, a standard health insurance policy covers a range of medical expenses, including doctor’s consultation fees, diagnostic charges, costs of medicines, ambulance, etc.

In addition to these, many health insurers offer specialised medical insurance plans for covering the treatment of critical illnesses, such as heart attack, kidney failure, stroke, COVID-19, and cancer, among others. You can assess your requirements carefully and choose the right type of medical insurance for yourself and your family members.

While a standard health insurance policy covers most healthcare expenses, what about some additional costs that you may incur? For example, you may need consumables during your stay at a hospital, or you may need money to support your dependent family members while you’re unable to earn.

In such situations, you may need a substitute or compensation for your loss. And a health insurance policy with daily hospital cash benefits can fulfil this requirement of yours.

As the name suggests, a daily hospital cash policy helps you to get fixed daily cash for each day you have to spend in a hospital. The amount that you can get as a daily hospital cash allowance is decided at the time of buying the policy. You can use this daily cash to meet your overhead costs and other expenses while you’re undergoing treatment at a hospital.

For example, suppose you’ve procured a medical insurance plan with a hospital daily cash allowance of ₹2,000. Now, if you get hospitalised for some reason, you will receive ₹2,000 from your health insurance provider every day till you remain in the hospital. The daily cash that you will receive from your insurer will be irrespective of the actual healthcare expenses that you may incur during your stay at the hospital.

What does a daily hospital cash plan cover?

As mentioned, you can procure a daily hospital cash policy, also called a medical cash plan, to receive a fixed allowance every day during your stay at a hospital. The daily hospital cash allowance that you will receive depends upon the amount chosen by you while buying the policy. It usually ranges from ₹500 to ₹10,000.

In some cases, the daily hospital cash allowance is mentioned as a percentage of the sum insured. For example, if you have purchased a health insurance policy with a daily hospital cash allowance of 1% of the sum insured, and the total sum insured of your policy is ₹5 lakhs, the daily cash you would receive in the event of your hospitalisation is ₹5,000.

You can use your hospital daily cash to meet other expenses (apart from the hospital bills) that you may incur during your stay at a hospital. These may include:

• The cost of consumables, such as gloves, masks, syringes, etc.

• To and fro travel expenses from the hospital

• Cost of hiring a personal attendant

• Your family’s living expenses till you’re unable to earn

What is the tenure of a hospital daily cash plan?

The tenure of a daily hospital cash policy may vary from one insurer to another. Usually, it ranges between 15 to 45 days. To know the exact tenure of the hospital daily cash plan that you’ve purchased, you need to check with your insurer. This information is usually provided in the policy document or fine print.

That is why we advise you to read the policy wordings carefully before buying a daily cash plan from an insurer. The longer the tenure of the policy, the better it would be. It’s because the tenure of the policy indicates the maximum number of days for which you can receive your daily hospital cash allowance right from the first day of your hospitalisation.

Are there any conditions attached to daily hospital cash plans?

Like any other type of health insurance policy, a daily hospital cash policy also comes with certain terms and conditions. One such condition is the waiting period. It refers to the time for which a policyholder has to wait before he or she can get the benefits of the daily hospital cash cover. In case a policyholder gets admitted to a hospital before the completion of the waiting period, no daily cash allowance would be given to him or her.

Another condition that a daily hospital cash plan specifies is that the policyholder should be admitted to a hospital for at least 24 hours. In case the period of hospitalisation is less than this, the insurer can deny paying the daily cash allowance. Also, the day-care procedures, i.e., those medical procedures that can be completed within a day, are not covered under the scope of these plans.

You might have understood the benefits of procuring a daily hospital cash policy by now. But in case you haven’t, let’s discuss them formally:

Compensation for all additional expenses

Even though your medical insurance policy will cover all healthcare expenses incurred by you during a medical emergency, you may incur some additional expenses that won’t be covered. Such expenses are known as inadmissible expenses. A daily hospital cash plan provides a daily lump sum that can be used to cover all such expenses.

Coverage above the sum insured

In case your hospital bills are more than the sum insured by your health insurance policy, you can use the money received as a daily cash allowance to pay the extra amount.

Preserves your NCB

If you are hospitalised for a minor complication where your hospital bills are not so high, you can avoid claiming your health insurance policy to preserve your No Claim Bonus (NCB). In such a case, you can use your daily hospital cash benefit to pay your hospital bills.

Procuring a daily hospital cash policy makes a lot of sense if you consider the benefits mentioned above. You can buy it as a separate policy or attach it as a rider to your basic health insurance plan.

With Tata AIG, you can compare health insurance plans and choose the best one as per your requirements. Our health insurance plans come with a host of benefits, such as maternity cover, newborn cover, COVID-19 coverage, and cashless treatment at over 7,000+ network hospitals across India.