Everything you need to know about daily hospital cash plans

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The medical infrastructure in India may be spread from end to end but is hardly affordable for middle-class Indian families. The aftermath of the Covid-19 pandemic has triggered a much-needed awareness for an effective health insurance cover to absorb the financial shocks that come in the form of healthcare expenses. Thus, it becomes crucial to understand the features and benefits of various health plans to be able to pick the best for individual needs.

While there are enough kinds of health insurance policies available in the market, one may not necessarily be aware of its features and benefits. Moreover, popular plans like a family floater and critical illness often become the only choice for the less-informed customers. But there are various customised insurance plans that cater to individual needs in an affordable way. One such product is Daily hospital cash plans.

What is a daily cash plan? 

A health plan that offers a fixed amount for every day of hospitalisation is known as a daily cash plan. Under this, the insurer pays a fixed amount on a daily basis when the policyholder gets hospitalised. Irrespective of the hospital bill including the room rent, doctor fees and other charges, the daily cash plan will pay the amount basis number of days the plan is opted by the insured.

This means if you are hospitalised and file a claim for a plan that pays Rs 1000 per day, the insurer will pay this amount for each day of your hospitalisation. The case will remain so irrespective of what your actual medical bill totals to. Whether you incur Rs 500 or Rs 3,000 as actual charges, the claim amount remains fixed. Real charges have no relation to the sum being paid by the insurer as it’s pre-determined.

A daily hospital cash plan would determine the coverage based on the daily allowance chosen under the plan. The range of daily cash generally available is from Rs 500 to Rs 2000. Besides, if the insured is admitted to the ICU, the daily cash allowance doubles up. Some plans also allow additional multiple of the cash allowance in case of surgery.

Benefits of daily cash plans?

While an individual health policy would cover most of your medical expenses, some inadmissible expenses like surgical accessories, X-ray charges or expenses incurred by accompanying relative/friend can be excluded. A daily cash plan will provide a lump sum figure that can be utilised to cover up for such expenses and also compensate for the income loss in case the only earning member of the family is hospitalised.

In fact, a hospital cash plan comes really handy for the last-minute hassles. For example, if the hospital bill is slightly above the sum assured by your mediclaim or family floater plan, a daily cash plan can cover the extra claim amount easily. Another good reason to opt for such plans is to avoid raising claims in your primary insurance for minor health complications. A daily plan can suffice for such tiny expenses without disturbing your wallet or insurance.

Premium rates

Multiple insurers offer daily cash plans at varied premiums. SBI General’s Hospital Daily Cash Insurance Policy, for example, offers up to four daily benefit amount options for 30 days – Rs 500, Rs 1,000, Rs 1,500, and Rs 2,000. For a sum assured of Rs 2,000, the premium of Rs 882/month is charged. Besides, the total premium for a family of 4 is Rs 1,764/month when each member is covered separately. If covered under a single policy, the premium goes up to Rs 3,086/month.

Waiting period

Any claim for hospitalisation relating to a pre-existing Disease and/or linked complications will be excluded until the expiry of 48 months of continuous coverage after the date of inception of the first policy with your insurer. Moreover, any claim for hospitalisation relating to the treatment of any illness within 30 days from the first policy commencement date will be excluded except when the claim is raised due to an accident.

What are the exclusions?

The claim for a daily cash plan isn’t paid in case of hospitalisation relating to sterility and infertility. This includes any type of contraception, sterilisation, gestational surrogacy, etc. Even maternity claims for childbirth (including complicated deliveries and cesarean sections incurred during hospitalisation) except ectopic pregnancy aren’t considered valid for claim.

A miscarriage (unless due to an accident) and lawful medical termination of pregnancy during the policy period is also not covered. Other exclusions include sleep disorder, Parkinson and Alzheimer’s disease, Venereal disease, sexually transmitted disease or illness except for HIV/AIDS.

Watch outs

Having stated multiple benefits of a daily cash plan, here’s what you should remember. Always look at these plans from tinted glasses. They’re supplementary plans that can only support your primary health insurance plan by increasing the coverage end-to-end. It would be rather foolish to solely depend on daily cash plans. Consider them as browny points for unexpected expenses that aren’t covered in your regular insurance plans.