Hospital Cash Benefit Rider

Note: Know more about what is term insurance first before reading this article.

What is Hospicare Rider?

Hospital cash benefit is one of the common term insurance riders. It is an optional add-on to your base term insurance plan that provides a fixed daily cash benefit to the insured during hospitalisation. This benefit is paid regardless of the actual medical expenditures incurred and can be used to cover different expenses such as income loss, personal expenses, or even family visits. In the case of many insurers, a percentage of the policy amount is provided to the policyholder as a benefit amount upon admission to the hospital and double the benefit amount if he/she is admitted to the ICU. In addition, this term insurance rider also provides a lump sum payout on undergoing surgery on a single plan. This rider can be availed at an affordable rate.

For example, Rajesh, a 36 year old male, got admitted to the hospital due to a surgery. Therefore, due to the hospicare benefit in term insurance, he was paid a portion of his total sum assured for each day he was hospitalized. When he was admitted to the ICU after the surgery, he was paid double the benefit amount. This eventually helped Rajesh pay off his hospital bills, and therefore, he was not burdened by the extra expense of treatment. Thus, the answer to ‘does term insurance cover hospital bills’ is yes, it can help cover hospital bills with the hospital cash benefit payout.

*Note - The hospicare benefit in term insurance can vary from insurer to insurer. Therefore, you should carefully review the terms, conditions, and limitations of the hospital cash benefit rider before purchasing it to ensure it aligns with your needs and expectations.

Eligibility Criteria to Buy a Hospital Cash Benefit Rider

How the Hospicare Benefit Rider Works? 

Hospitalization 

The life assured is hospitalised for a minimum time, i.e., 24 hours, because of illness or injury. 

Filing Claim 

The policyholder files a claim for the daily cash benefit 

Benefit payment 

The insurer pays the fixed amount daily for each day of hospitalisation 

Use of Funds 

The life assured can use the money for a number of expenses, such as non-medical costs.

What Are the Benefits Of The Hospicare Benefit In Term Insurance?

The following are the benefits of the Hospicare Rider in Term Insurance:

• Daily Cash Benefit: If the policyholder is hospitalized for a specified number of days, the hospital cash benefit provides a certain amount of cash as a daily benefit. The amount is doubled when the policyholder gets admitted to the ICU.

• Cash Usage: The benefit amount received from the rider can be used to cover various expenses during hospitalization, such as additional medical costs, transportation, accommodation for family members, or any other expenses that arise.

• Relieve Burden Off Family: The Hospicare Rider helps your loved ones in not stressing upon paying huge amounts of money for your treatment. The rider helps compensate for the hospital charges and pays a chunk of the hospital bill and relieves your family off the extra burden.

• Lump sum amount: This rider provides a lump sum payout in case of ICU or surgical hospitalization. This benefit would only be paid if the tenure of hospitalization in ICU or because of a medical emergency is at least for about 2 days (48 hrs).

• No need of buying a new plan: The hospital cash benefit rider will nullify the need to purchase a new plan to bear the expenses associated with hospitalization because of an emergency situation. Also, you will be relieved from the difficulty of managing 2 insurance plans and paying a higher amount of premium as compared to hospicare rider.

• Tax Benefits: You can claim term insurance tax benefits under Section 80D of the Income Tax Act, 1961 with the hospital cash benefit rider.

Documents Required for Hospicare Benefit in Term Insurance

Here is a list of documents required at the time of claiming the hospital cash benefit rider:

• Original policy documents

• Duly filled claim form

• Policyholder’s Photo ID proof

• Policyholder’s Address proof

• Certificate of Medical Practitioner

• Medical reports mentioning the policyholder’s diagnosed illness

• Photo ID proof of Nominee

• Address proof of Nominee

• Copy of bank statement and canceled cheque

Things to Know Before Adding the Hospicare Rider

Below mentioned are a few things to consider when you buy or avail the Hospicare benefit in term insurance plan:

• Provide the original hospital payment receipts along with other necessary documents required to claim/avail the Hospicare Rider.

• Consider your future goals and health conditions before you choose the hospital cash benefit rider.

• The rider gets expired when your term plan expires/concludes.

• Carefully review the terms, conditions, and limitations of the Hospicare rider before purchasing it, to ensure it aligns with your needs and expectations.

Wrapping It Up!

The Hospital Cash Benefit Rider can provide valuable advantages and added financial security to individuals who have a term insurance policy. It also allows you to live peacefully, knowing that your family doesn’t have to pay a huge amount of money when you are admitted to the hospital.

Note: Check out the best term insurance plan in India and choose one that suits your requirements.

Note: You should also check the benefits of term life insurance if you are planning to purchase the term insurance plan.

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