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Hospital Cash Insurance
Hi, I’m Diksha. Recently, I learned the hard way about a benefit in my insurance policy that I didn’t even know existed – and because of that, I ended up missing out on ₹10,000! It felt frustrating to realize that a simple lack of awareness cost me that much. Which could have helped me in managing my healthcare expenses.
That’s why I’m here to share my story, so you don’t make the same mistake I did.
Did you know your insurance can actually pay you for being in the hospital? It’s called hospicash – think of it as cash just for staying there.
If you’re admitted for a day or more, your insurance could give you a bonus – extra cash right in your pocket! Usually, it ranges between ₹500 and ₹5,000 per day, depending on your plan. Honestly, that’s pretty awesome, don’t you think?
Why is this so awesome?
Consider this: During 2020-2021, around 21 million people were hospitalized in India under the pradhan mantri jan arogya yojana (PM-JAY), and about 55% of those hospitalizations were in private hospitals.
Now, imagine if all 21 million people stayed for just 3 days and received a minimum of ₹500 per day from their policy. let’s do the math:
Number of people hospitalised: 21 million (21,000,000)
Number of days: 3
Cash per day: ₹500
Total cash = 21,000,000 people × 3 days × ₹500 per day = ₹31,500,000,000
That’s ₹31.5 billion! imagine if these 21 million people didn’t know about this benefit – that’s ₹31.5 billion lost. a significant amount of money just slipping through the cracks.
What if you were one of them?
I learned my lesson – now it’s time for you to learn yours before it’s too late.
Through this blog, I will help you to understand each and everything about Hospital Cash Insurance: what it is, how it works, and how you can benefit.
Also read: What is Domiciliary Hospitalisation?
What is Hospital Cash Insurance or Hospicash Insurance?
Hospital cash insurance, also known as Hospicash, is a benefit that comes with a health insurance policy rather than being a standalone policy. Typically, you add it on as a rider or an extra benefit to your main health insurance policy.
Although Hospicash is commonly offered as an add-on, some insurance companies may include it as a standard benefit in certain plans. It can be part of both individual health insurance policies (IHI) and group health insurance policies (GHI).
To find out if your specific policy includes hospicash, it’s best to review your policy document or contact your insurance provider directly or if it’s through your employer, ask your HR department.
Let’s break it down into a few scenarios to better understand how hospicash policy works:
Scenario 1: Hospicash included in your Individual Health Insurance (IHI) policy
You buy an insurance policy from company XYZ that fits your budget and needs. It has a small perk called a daily cash benefit or hospicash, offering ₹2,000 per day for each 24-hour period you’re admitted to the hospital. Once your treatment is complete, you can claim this benefit by submitting your details to the insurer. After verification, the insurer will directly deposit the amount in your bank account.
Scenario 2: Hospicash included in your Group Health Insurance (GHI) policy
You get hospitalised for 24 hours or more, and decide to use your company’s group insurance policy. If it includes a daily hospital cash benefit of ₹2,000 per day for each day of your hospital stay, you can apply for this cash benefit once your treatment and the insurance claim are processed. After submitting the required details, and upon verification, the insurer will deposit the amount directly to your bank.
Scenario 3: Hospicash as an Add-on/Rider
You already have a healthcare insurance policy, whether individual or group (offered by your employer). Both can come with an optional add-on called hospicash, offering ₹5,000 per day for each 24-hour hospital stay, for a small additional premium cost. This add-on can provide extra financial support during your hospitalisation, helping with non-medical expenses that might come up.
Quick read: What is Group Health Insurance?
How Does the Hospital Daily Cash Policy Work?
A hospital daily cash policy is a helpful benefit that provides financial support during your hospital stay. it works based on a few key criteria:
- Fixed cash amount: The policy provides a fixed daily amount, which can range from ₹500 to ₹5,000 per day, depending on your policy terms. you can use this cash however you like—whether it’s for covering non-medical expenses, compensating for lost income, or simply adding some comfort to your hospital experience.
- Hospital stay requirement: The benefit is payable for each 24-hour period that you are hospitalized. you start receiving the payout once you’ve completed the required duration of hospital admission, which is usually one day.
Example Scenario
Imagine you have a hospicash benefit of ₹2,000 per day, and you are hospitalised for 4 days. After submitting your claim and completing the verification process, you would receive ₹8,000 as a lump-sum payment. This money can help with additional costs that arise during your stay, making it easier to manage expenses.
Key Takeaway
Hospital daily cash is designed to give you extra financial breathing room during hospitalization, letting you focus on recovery rather than stressing over incidental costs that aren’t covered by standard health insurance.
Suggested read: Types of Health Insurance
Who Should Opt for Hospital Cash Insurance?
Hospital cash insurance is a versatile benefit that can provide significant support to different groups of people, depending on their needs. let’s explore how this coverage can benefit various categories:
1. For Employees
Employees with group health insurance (GHI) provided by their employer can benefit greatly by adding hospital cash insurance as a rider/add-on, especially if it’s not already included in their existing policy. Here’s how it will benefit:
1.1 Coverage for All Dependents
Group health insurance policy typically covers not only the employee but also their spouse, children, and sometimes parents and siblings. With hospital cash insurance, anyone covered under the policy is eligible for the benefit. This means, regardless of who gets admitted, the payout will go directly to the employee’s bank account, providing financial relief during challenging times.
1.2 Cashless Benefit + Extra Cash Payout
GHI policies often provide a cashless facility, meaning you won’t have to pay upfront for medical treatment if you visit a network hospital. In case you or a covered dependent is hospitalised for a day or more, the treatment costs are handled directly between the hospital and the insurer, with the exception of any exclusions. On top of this, the hospital cash benefit can be claimed for each day of hospitalisation. This additional cash payout goes directly into your account, reducing the out-of-pocket burden and making a tough situation a little easier to manage.
2. For Employers
Employers offering hospital cash insurance as part of a group health insurance policy is a win-win for employers. By providing this extra benefit, employers show they are invested in their employees’ well-being, which helps build loyalty and enhances job satisfaction.
Employees who have hospital cash coverage are likely to feel more supported by their employer during difficult times, leading to increased trust and morale. For employers, it’s an opportunity to make their benefits package more attractive and competitive in the market, which can help in retaining and attracting talent.
Also read: Employer Employee Insurance
3. Individuals with High Medical Needs
Hospital cash insurance is especially useful for senior citizens and individuals with ongoing health conditions that may require frequent or extended hospital stays. Hospitalisation can bring not just medical costs but also the burden of additional non-covered expenses, which can add up quickly for those with chronic health conditions.
The daily cash benefit provided by hospicash policy helps to cover incidental costs like additional home care post-discharge, transportation, and even compensation for the potential loss of income for family members who might need to take time off to care for their loved ones. For seniors, this extra financial assistance can bring much-needed peace of mind.
4. Anyone aged 18 to 99
Hospital cash insurance is available to anyone between 18 to 99 years of age, making it a broad and inclusive benefit for nearly everyone.
- For young adults, this coverage can provide extra financial relief, especially when unexpected hospitalisation disrupts their budget.
- For middle-aged individuals balancing work, family, and financial commitments, hospital cash insurance acts as a cushion, ensuring that a hospital stay doesn’t mean sacrificing other financial priorities.
Since it can be added to both individual and group health policies, it’s accessible to a wide demographic, helping anyone who wants additional financial security for those times when life throws lemons and it becomes difficult to make lemonade.
Also read: Pre and Post Hospitalisation Expenses
Benefits of Hospital Cash Insurance
Hospital cash insurance provides a daily cash benefit for every continuous 24-hour hospitalisation period. This benefit helps cover incidental expenses that may not be included in traditional health insurance coverage.
Here’s how it works:
- Daily Cash Benefit: provides a fixed amount for each 24-hour period you’re hospitalised due to sickness or accident.
- Accidental Bodily Injury: If the hospitalisation is due to an accident, the policy offers twice the daily benefit for up to 5 days per hospitalisation or more according to the policy.
- ICU Hospitalisation: If the insured is in the ICU, twice the daily benefit is provided for up to 7 days or more based upon the policy.
- Convalescence Benefit: After 10 consecutive days of hospitalisation, the insured receives three times the daily benefit or ₹5,000, (whichever is less) based upon the policy. This is payable once per policy period generally.
Hospital Cash Insurance Coverage
- Inclusions: The policy provides a daily cash benefit for hospitalisation, enhanced benefits for ICU stays and accidents, and a convalescence benefit for extended stays. It is flexible in usage, allowing the insured to use the benefit for incidental or non-medical expenses.
- Exclusions: There are numerous exclusions, including pre-existing conditions, mental health treatments, cosmetic procedures, hazardous activities, maternity-related treatments, substance abuse, and experimental treatments. Hospitalisations outside India and alternative medicine are also not covered generally.
This list of inclusions and exclusions helps policyholders understand what is covered and what isn’t under the Hospital Daily Cash Insurance Policy, enabling better decision-making and managing expectations during claims. Please check your policy thoroughly for the exact inclusions and exclusions.
Also read: Health Insurance with OPD Cover
Coverage Limit under the Daily Hospital Cash Plan
A daily hospital cash plan provides financial support for each day of hospitalisation, but there are certain coverage limits that policyholders need to be aware of. Here’s a detailed overview of the coverage limits under a daily hospital cash plan:
1. Daily Benefit Amount
The daily cash benefit typically ranges from ₹500 to ₹5,000 per day, depending on the specific terms of the policy. The amount is predetermined and is not linked to the actual medical expenses incurred.
2. Maximum Number of Days per Hospitalisation
Mostly daily hospital cash plans limit the number of days for which you can receive a cash benefit during a single hospitalisation. This can vary between 30 to 45 days per hospitalisation, depending on the policy.
3. Maximum Number of Days per Policy Year
The plan often includes a cap on the total number of days covered per policy year. Typically, this limit can range from 60 to 90 days per policy year, ensuring that long-term or multiple hospitalisations have some coverage, but within a defined range.
4. Intensive Care Unit (ICU) limit
If the insured is admitted to an ICU, the daily cash benefit is often doubled for a specified period, such as up to 7 days per hospitalisation. The maximum limit for ICU coverage is usually capped at 15 days per policy year.
5. Convalescence Benefit
If the insured is hospitalised for 10 consecutive days or more, they are eligible for a convalescence benefit 3 times the daily benefit or ₹5,000, whichever is lower. This benefit is available once per policy period.
6. Companion Benefit Limit
Some plans cover the cost of a companion staying with the insured during the hospital stay. There is typically a limit on the number of days for which this benefit can be claimed, and it is subject to a maximum payout per policy year.
7. Accident-related Hospitalisation
In case of hospitalisation due to an accident, some policies offer a double daily cash benefit for a specified period, such as up to 5 days per hospitalisation.
8. Deductible
Usually, the first 24 hours of hospitalisation are not covered, meaning the daily cash benefit begins from the second day of the hospital stay. This deductible is applicable to every hospitalisation claim.
9. Multiple Hospitalisations
The plan may also specify limits on how many times you can claim the daily cash benefit for multiple hospitalisations within a policy year. While most policies allow multiple claims, they are subject to the annual limit on days covered.
10. Grace Period for Renewals
If the policyholder fails to renew on time, there is usually a grace period of 30 days within which the policy can be renewed without losing coverage benefits, including those related to pre-existing conditions.
11. Children and Dependent Coverage
Coverage for dependent children may come with specific age limits. Typically, children aged between 3 months and 23 years who are financially dependent on the insured are eligible for coverage. The limits on the number of days of benefit apply equally to dependents.
Recommended read: Group Personal Accident Insurance
Tax Benefits of Hospital Cash Insurance
You can claim tax benefits under Section 80D of the Income Tax Act in India for hospital cash insurance premiums paid. Deductions can be claimed for the policyholder, spouse, dependent children, and parents.
- Individuals can claim a deduction of up to ₹25,000. For those classified as senior citizens (over 60 years), the deduction limit goes up to ₹50,000.
- Individuals can also claim a deduction of up to ₹25,000 for health insurance premiums paid for their parents. If both parents are senior citizens, the limit goes up to ₹50,000.
For example, if you are paying a premium of ₹5,000 for a hospital cash insurance policy, you can claim a tax deduction of the same amount against taxable income.
Please note that the benefits may change depending on circumstances and changes in the Income Tax Act. A tax professional will be the best person to guide you in these matters.
Related read: Group Health Insurance Tax Benefits
How to File a Hospital Cash Insurance Claim
Claim Process
- Intimation of Claims: You must inform your insurer within 48 hours after discharge from the hospital. Some insurers may extend this to 7 to 30 days, provided you give a valid reason for the delay based on your policy terms.
- Submission of Documents: After being discharged, you will need to submit necessary documents such as the hospital discharge summary, medical reports, doctor’s certificate, valid photo ID, and any other relevant paperwork.
- Verification: The insurer will verify your submitted documents and evaluate the claim. If they approve it, the process moves forward. If it is denied, they will provide a written explanation of the reasons for denial.
- Payout: Once the claim is approved, the fixed cash benefit will be directly deposited into your bank account.
Also read: Health Insurance Claim Process
Hospital Cash Insurance under Group Health Insurance Plans
Hospital cash insurance under group health insurance plans provides policyholders with daily cash benefits to cover out-of-pocket expenses during hospital stays. This additional financial support helps reduce the burden of hospital bills, ensuring no extra stress.
For Employers
As we have pointed out earlier, providing health benefits is a significant factor in attracting and retaining talent. Group health plans are a handy and efficient way of doing this.
With a group health insurance plan, employers show their commitment to employee well-being and create a more engaged workforce.
For example, Onsurity, India’s only healthtech company, provides comprehensive employee healthcare to SMEs, MSMEs, startups and growing businesses.
Group policies
The premium payments and claims process can be simplified, and the amount of administrative work required is considerably low.
For Employees
For employees, hospitalisation can be worrying because of health issues and the financial implications.
Under a group plan, hospital cash insurance provides a safety net to make them feel more secure and valued. It creates a workplace culture that benefits all concerned.
Conclusion
Hospital cash insurance ensures financial protection during any unexpected hospital stays. You receive cash payments that cover the number of days spent in the hospital, to be used for both medical and non-medical costs.
While for employers, it is a way of showing commitment to employees, for employees, it offers peace of mind. Whether as an individual or a group policy, consider making hospital cash insurance an essential part of your health insurance portfolio.
To discover more, visit the Onsurity website to explore our tailored options or schedule a demo today.
FAQs:
1. What expenses do hospital cash insurance cover?
Hospital cash insurance gives you a daily cash amount for each day of hospitalisation. It covers various expenses like food, travel, and other costs that health insurance may not fully cover. This can be helpful for managing everyday expenses.
2. Is there a waiting period for hospital cash insurance?
Yes, depending on the insurance provider, there is a waiting period for hospital cash insurance. It will be clearly mentioned in the policy and can be as little as 24 hours or longer than a month. It is important to check this carefully.
3. Can I purchase hospital cash insurance if I already have health insurance?
Yes, hospital cash insurance can be added to existing health insurance or purchased as a separate policy.
4. What is the typical daily benefit amount provided by hospital cash insurance?
The benefit amount varies widely, depending on the insurer and policy chosen. It could be a few hundred or many thousands a day. Before purchasing a policy, consider the amount you may need.
5. Are pre-existing conditions covered under hospital cash insurance?
No, pre-existing conditions are generally not covered. However, some insurers allow pre-existing diseases after a waiting period. Therefore, it is important to check the terms and conditions carefully.
6. What types of hospitalisations are covered by hospital cash insurance?
Hospital cash insurance generally covers hospitalisations due to illness or accidents. Common exclusions are hospital stays for cosmetic surgery and self-inflicted injuries. The hospital stay should be for more than 24 hours.
7. Can I customise my hospital cash insurance policy?
Some insurers offer options, such as selecting the daily benefit amount, waiting period, and additional coverage options. They let you tailor the policy to your specific circumstances.