Hospital Cash Benefit Rider
Hospital cash is one of the term insurance riders which can be very helpful in difficult situations. Hospital Cash Benefit rider is an optional additional coverage which can be added to the policy to increase the power of coverage of the base policy. Hospital Cash Benefit rider provides a fixed benefit amount in case the life assured needs to hospitalised for treatment. Under this rider a fixed amount shall be provided to the life assured for each day the life assured is hospitalised. Hospital Cash Benefit rider also provides ICU benefits and a lump sum amount in case the life assured requires surgery for the treatment.
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**Tax benefits are subject to changes in Income Tax Act.
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What is a Hospital Cash Rider?
Hospital Cash rider is one of the important term insurance riders. It provides a fixed benefit to the life assured in case they are required to be hospitalized for treatment. The rider provides a fixed amount for each day of hospitalization as well as ICU benefits. Hospital Cash rider also provides a lump sum benefit on undergoing surgery on an individual policy.
Highly beneficial for the life assured to ensure financial stability, Hospital Cash Rider is the ultimate helping hand at the time of an emergency situation. What’s best about the rider is that apart from offering a daily sum, it also provides one with tax benefits as per Income Tax Act, 1961.
An important point to keep in mind is that the rider does not feature a ‘No Claim Bonus’ benefit, maturity benefit or death benefit. However, the rider comes at an affordable rate.
Importance of Hospital Cash Rider
The hospital cash rider can be a beneficial addition to your term insurance policy. If you have yet to decide whether or not to add this reliable and reasonable rider to your term policy, make sure you do so for the following reasons:
- Your Support During Medical Emergencies: Your hospital cash rider will come across as your ultimate financial support during the already stressful emergency situations. Since the rider offers cash for each day of hospitalization, you won’t have to arrange money or compromise on your daily needs to meet the hospital expenses. The rider would ensure that your mental peace is not compromised due to lack of funds to bear the hospitalization expenses.
- Fixed Amount Daily: Under the hospital cash rider, you will get a fixed cash amount on a daily basis until your hospitalization. This benefit would be payable to you if the hospitalization is for a minimum period of 48 hours while the policy is in force. Note that this would be a specified, fixed amount and not an amount related to the actual expenses incurred during the hospitalization period.
- Lump Sum Amount: The rider will provide you with a lump sum amount pay-out in case of Intensive Care Unit or ICU hospitalization or surgical hospitalisation. The benefit would be payable only if the period of ICU hospitalization or hospitalisation due to medically necessary surgery is at least for a minimum of 48 hours. The surgical hospitalization may or may not be available under the rider as some insurance companies provide the benefit while some do not.
- No Need to Buy New Policy: The hospital cash rider will eliminate the need of buying a completely new policy to bear the expenses related to hospitalization due to an emergency. Moreover, you will be saved from the hassle of managing two insurance policies and paying a greater premium as compared to the hospital cash rider.
- No Mental Stress: Once you have the hospital cash rider supporting you over your term insurance plan, you would be free from financial stress of any kind. You or your family members won’t have to stress about gathering funds at the last moment to take care of the hospitalization expenses. Instead, you and your family members will be able to focus on the treatment rather than the lack of money to support it.
- More Tax Benefits: You will be eligible for tax benefits under the Section 80D of the Income Tax Act, 1961. The rider benefits would be over your tax benefits under the base term insurance policy. It simply means that you will get to enjoy enhanced tax benefits as per the prevailing tax laws.
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Eligibility Criteria of Hospital Cash Rider
The eligibility criteria for Hospital Cash Rider is as follows:
Eligibility Criteria for Hospital Cash Rider
Minimum Entry Age
Maximum Entry Age
Maximum Maturity Age
Minimum - Same as base policy’s sum assured
Maximum - No Limit
Coverage Time Period
Same as base policy’s term
Premium Payment Term
Same as base policy’s term
Premium Payment Mode
Same as premium payment mode of the base policy
Documents Required for Hospital Cash Rider Claims
Following is the list of documents required while reporting a claim for Hospital Cash rider:
- Policy Documents Original/Copy
- Filled Claim Duly Filled
- Photo ID Proof of Policyholder
- Address Proof of Policyholder
- Attending Medical Practitioner's Certificate
- Medical Test Reports
- Nominee’s Photo ID Proof
- Nominee’s Address Proof
- Copy of policyholder’s bank statement/cancelled cheque
- Medical Reports (stating the life assured’s diagnosed illness)
Hospital Cash Rider Exclusions
The list of exclusions under Hospital Cash rider includes:
- Pre-existing medical conditions
- Hereditary Medical Conditions
- Weight Reduction Treatment
- Any hospitalization outside India
- Attempt to suicide or self inflected injuries
- Drug Abuse/Overdose
- Participation in civil commotion, riots, war or rebellion activities
Things to Remember About Hospital Cash Rider
Here is a list of a few key things you must keep in mind regarding the hospital cash rider:
- The Hospital Cash Rider can only be purchased along with the base term insurance policy and not separately.
- The rider does not come with its individual waiting period. It follows the waiting periods of the base term policy.
- The rider comes with a vast array of options to choose from for premium payment such as monthly, yearly, and more.
- A policyholder can avail the hospital cash rider benefits by paying an additional premium price.
- The rider can terminate upon the termination of the expiration of the rider term, lapse of the base plan and expiry of the reinstatement period.
The hospital cash benefit rider is not a compulsion for a term insurance policy buyer. The policyholder is free to add the rider to their base term insurance policy if they find it beneficial for them in the future. If you wish to opt for the rider it is highly recommended that you go through the policy wordings carefully.
Term Insurance Companies
- ICICI Prudential
- Aditya Birla
- PNB MetLife
- Bharti AXA
- Edelweiss Tokio
- Bajaj Allianz
- Canara HSBC OBC
- Tata AIA
- Future Generali
- Star Union Dai-ichi
- Ageas Federal
Disclaimer: InsuranceDekho does not endorse, rate or recommend any particular insurance company or insurance plan.
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