A health insurance plan provides the much-needed financial protection during medical emergencies. It offers peace of mind as you may receive quality treatment without having to worry about making last-minute arrangements for finance.
Although mediclaim policies offer coverage against your hospitalization expenses, certain medical costs are not covered under general health insurance plans. One common example includes the cost of consumables or expenses incurred by an accompanying family member. In order to enjoy coverage against such costs, you may consider investing in a hospital cash plan.
Understanding hospital cash plans
A hospital daily cash policy is an insurance product offered by insurers, wherein you are paid a specific amount for each day that you are hospitalized. The insurance provider pays the pre-determined amount irrespective of the actual expenses incurred by you. Nevertheless, it is important to note that there is a certain cap for which this benefit is payable.
A daily hospital cash benefit policy may be either purchased as a standalone plan or as a top-up with your personal health insurance policy. Most financial advisors recommend purchasing such a rider as it helps reduce your financial burden during troubled times. You may protect yourself from unexpected expenses that may arise as a result of your hospitalization.
Following are four primary features of a hospital cash benefit insuranceplan.
- Offers a lump sum amount
Under the terms and conditions of such an option, the insurance provider is liable to pay a lump sum amount for every day that you are hospitalized. This amount may be used to meet numerous expenses such as surgical accessory expenses, X-ray cost, transportation charges, and other inadmissible costs.
- Acts as a compensation for loss of income
In case of hospitalization, you may temporarily lose your source of income. The amount that you receive acts as a compensation for the same and helps you meet the necessary expenses without any financial constraints.
- Offers tax exemptions
Just like health insurance policies, a hospital cash benefit insuranceplanoffers tax benefit under Section 80D the Income Tax Act, 1961. The amount paid towards the premium of such an insurance policy may be claimed as a deduction up to a limit of INR 25,000. Senior citizens may avail of a higher limit of INR 50,000 as per the latest Union Budget announcement. Therefore, those looking to reduce their tax liability may consider purchasing such a rider.
- Preservation of No Claim Bonus
No Claim Bonus is the discount that you are eligible for, in case you do not make any claims in the past policy year. If your hospitalization bill amount is not very high, you may seek the benefits of your daily hospital cash benefit policy, instead of making a claim towards your health plan. This helps you keep the No Claim Bonus feature intact, allowing you to receive a discount towards payment of future premiums for your health plan.
Things to consider while buying a hospital daily cash plan
There are numerous aspects to consider while purchasing such a rider. It is important to select the appropriate amount of coverage based on your needs and requirements. You may also check the waiting period of the policy. You may identify various insurance providers and select the one that offers a shorter waiting period. In addition, you may consider the maximum ceiling for which the benefit is payable. Some insurance providers offer the benefit for 30, 60, or 90 days in a particular policy year.
A hospital cash plan indeed is a life-saver as it helps you deal with unexpected expenses during your hospitalization. However, do remember that such a plan is not a substitute for a health policy. You may supplement it with your existing mediclaim policy so as to enjoy maximum benefits.