Understanding Hospital Daily Cash Plans

A plan which seeks to supplement your normal health insurance cover, a hospital daily cash plan provides various advantages. But first, let us understand the plan in details.

What is a hospital daily cash plan?

As the name suggests, the hospital daily cash plan is a health plan which provides a fixed amount for each day you are hospitalized. The amount paid is fixed at the time of policy issuance and would remain fixed. The plan is a defined benefit plan in the sense that it pays a fixed amount irrespective of the actual amount of expenses.

So, if you are hospitalized with a plan which pays Rs.1000 per day of hospitalization, whether you incur Rs.800 or Rs.1200 as actual charges would be irrelevant and the insurer would pay a fixed benefit of Rs.1000 for each day of your hospitalization.

What is the coverage under the plan?

A daily hospital cash plan would determine coverage based on the daily allowance you choose under the plan. The range of daily cash available is from Rs.500 to Rs.3000. if the insured is admitted in the ICU, the daily cash allowance generally increases twofold or by any other factor as specified in the policy. Some plans also allow additional multiple of the cash allowance in case a surgery is undertaken by the insured.

Are there any conditions in the plan?

Like any other health insurance plan, these plans too come with a waiting period clause. However, the waiting period in these plans are of shorter tenures. Another condition that the plan specifies is that the hospitalization must be for a minimum period of 24 hours to avail the allowance payable.

Thus, Day Care Procedures are not covered under the scope of this plan. There is also a maximum ceiling on the number of hospitalization days in a policy year for which the allowance is payable. This ceiling is usually of 30, 60 or 90 days.

What are the benefits of the plan?

The advantages that a daily hospital cash plan provides are many. So let’s understand them one at a time:

• Blanket cover for those additional expenses – Even though your mediclaim policy covers your hospitalization expenses, some expenses are not covered by your health plan. Such expenses are called inadmissible expenses and include surgical accessories, X-Ray charges, expenses incurred by accompanying family members, etc. A daily hospital cash plan provides a lump sum amount in case of hospitalization and this amount can be used as per the liberty of the insured. He can use the money for meeting such additional expenses or for even compensating the loss of income during the period of hospitalization.

• Taking care of extra hospital bills – Even though your health plan would cover your hospital bills, in case of a huge claim, your health plan might fall short in meeting the entire claim. A daily hospital cash plan would help in covering up any extra claim you might face.

• Preserving your No Claim Bonus (NCB) – If you are hospitalized for a minor complication, the bill for which is not very high, you can utilize your daily cash plan to pay for the hospital bills instead of raising a claim in your health plan. This would help you in preserving the No Claim Bonus of your health insurance plan which would have been lost otherwise.

What should you do?

Buying a hospital daily cash plan makes a lot of sense if we take the above benefits of the plan into consideration. However, do remember that these plans should be considered as a supplement to your existing health insurance plan and not its substitute.

Hospital cash plans only provide a daily allowance in case of hospitalization while a health plan provides a more comprehensive coverage and cannot be foregone. Instead, you should add a hospital daily cash plan to your existing health plan and cover those little extra expenses which a hospitalization is bound to throw your way.