Why Should you go with the Daily Hospital Cash Plan?

Why Should you go with the Daily Hospital Cash Plan

One buys health insurance policies to beat the rising medical cost. But life is full of surprises. When you approach your health insurer with the hospital bill, the insurer doesn’t settle the out of pocket expenses. In such an event, notipst having a daily hospital cash (DHC) plan can prove to be costly. Let’s see what a DHC plan is and where does it fit into your insurance portfolio.

Certain non-admissible expenses like eatables, nutritionist consultation, transportation expenses, attendant charges, etc.; incurred during one’s hospitalisation are not covered by the insurer. All these are out of pocket expenses which are excluded from the policy.

So, is there any policy which can cover such expenses?  

Yes, daily hospital cash (DHC) plan is one such policy which covers non-medical expenses and reimburses a policyholder on a daily basis. In this plan, one gets a specified amount for each day of hospitalisation. The pay-out in the plan is not linked to actual hospitalisation expenses; which means that one can file a claim under both daily hospital cash plan and mediclaim policy.

Let us understand this with the help of an example –

Mr. Raj is hospitalised from last five days. He holds a mediclaim policy of Rs 5 lakhs with the Daily Hospital Cash benefit of Rs 1000/per day. Suppose the total hospitalisation bill comes out to be Rs 35,000. His mediclaim policy will cover the hospitalisation expenses of Rs 35,000, and he will also receive an additional DHC benefit of Rs 5000 (5×1000) for 5 days.

However, if Mr. Raj holds Daily Hospital Cash plan only then he would be entitled to receive  Rs 5,000.

How are the expenses covered here?

Unlike choosing the sum insured under a mediclaim policy, in a DHC plan, decide the amount of daily benefits you want to get. Usually, DHC plans come with a daily benefit of Rs 500/Rs 1,000/Rs 1,500/Rs 2,500 and Rs 3,000. The actual pay-out is based on the limit of DHC plan, however, in the case of circumstances like ICU, the pay-out can be high.

Benefits of Daily Hospital Cash Plan:

  1. Additional expenses covered: Apart from the major hospitalisation expenses, some inadmissible expenses which are not covered by health policy can be reimbursed with the help of this plan. A policyholder gets this daily benefit as a lump sum that he/she can use as per requirements.
  2. Preserving No Claim Bonus: In case insured is hospitalised for 2 or 3 days and the bill is not huge, the same can be settled with the help of the amount received from the daily cash policy. In this way, the insured will keep the medical policy untouched, and thus he/she will become eligible to get No claim bonus (NCB) next year. It is a bonus which is offered to policyholders for not making a claim in the previous policy year and helps in trimming the premiums or increasing the sum insured.  

Should you buy this plan alone?

No, this is a plan which should be used as an add-on to the normal health policy as this alone will not be able to cover up all the expenses during hospitalisation. The first ring of defense should always be a  comprehensive health insurance policy. Then go for a DHC plan as an add-on cover.    

Important points to remember:

Though, the working of DHC plans may look simple, here are some points that should be considered:

  • Number of days covered: The insurer may cap the maximum stay in a hospital at 30, 40 or 60 days in one policy tenure
  • Benefits during major surgeries: Most of the insurers double the daily benefit of DHC if the policyholder is hospitalised in an ICU. In the case of major surgeries involving heart, brain or liver, the benefit can be more, say 20 times of the DHC chosen. Please check with your insurer on this aspect before you sign the dotted line
  • Minimum days of hospitalisation: Like a mediclaim policy that requires a minimum of 24 hours of hospitalisation, a policyholder should be in the hospital for a minimum of 3 or 4 days to avail the benefit under DHC plan. Some insurers offer Rs 1,000 per day per member for a maximum ten days with minimum three days of hospitalisation.

The Final Verdict

The best way to keep one’s family safe from a medical crisis is buying a health policy wherein all the risk factors related to the health of different members are covered. However, to cover other out of pocket expenses, add a daily hospital cash rider to your policy as an additional benefit.

Editorial Team
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