Hospital Cash Benefit Rider in Term Insurance- A Detailed Guide


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Have you heard about Hospital Cash benefit Rider in Term Insurance? Do you know what benefits you can gain from this term insurance rider? Let’s find out in this post.

Hospital Cash Benefit is an additional coverage or rider that can be included in your term insurance policy to enhance the strength of your term plan coverage. This is regarded as a helpful term insurance rider that aid the insured in times of difficulty.

Under this rider, the insured can avail a fixed amount as hospital cash rider benefit if he/she ever requires hospitalization for a treatment. With this rider in hand, the policyholder can get a fixed sum of money for each day that the person is hospitalized for a treatment.  Besides, you also get ICU benefits under this rider along with getting a good capital in case the insured needs surgery as part of the treatment under this term insurance rider.

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What do you mean by a Hospital Cash Rider?

This is a significant term insurance rider that allows a fixed monetary benefit to the insured in case the person gets hospitalized due to an ailment. Under this rider the insured receives a fixed payment every day till the hospitalization process of the person continues. Further, he/she can also get ICU benefits. Moreover, if you have an individual policy, you can even seek a huge amount from the insurer for undergoing a surgical procedure during your hospitalization process. This is a highly useful rider that allows monetary stability to the insured during the time of health emergency. It also offers tax benefits under Income Tax Act, 1961.

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Why is Hospital Cash Rider Important?

This is a reliable rider that adds value to your term plan. Here are some beneficial points to remember before buying this add-on cover under your term plan.

  • This rider supports the insured in case there is a medical emergency by offering financial aid
  • The per day cash that can be availed by the insured in the event of hospitalization, helps in meeting the expenses smoothly with the help of this rider
  • The rider allows the insured to have a fixed amount of cash daily till the person is in the hospital. However, the minimum period of hospitalization should be 48 hours to avail this benefit
  • The rider also provides the insured with a lump sum amount in case patient is admitted in ICU or requires a surgery. Here again, the minimum stay at the hospital should be 48 hours at least
  • This rider also eliminates the need of a new policy to cover hospitalization costs and the hassle of managing two policies
  • The policy also allow mental peace to the policyholder by supporting you monetarily
  • Lastly, the insured is also eligible for tax benefits under Section 80D of the IT.

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Read More: Income Benefit Rider in Term Insurance – A Detailed Guide

What is the eligibility criteria of Hospital Cash Rider?

Below are the requirements that a person needs to fulfill to include this rider under their plan:

  • Min. age of entry  – 18 years
  • Max. age of entry – 65 years
  • Maximum Maturity age – 85 years
  • Sum Assured Minimum – Equal to the sum assured of the base policy
  • Sum Assured Maximum – No Max limit
  • Time duration of the cover – Same like base policy cover
  • Premium payment duration – Can use the same duration as the base policy
  • Premium payment mode- Payment can be done as  per the mode used for base plan premium payment
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8 Documents Needed for Raising Hospital Cash Rider Claims

Below are the documents required for raising Hospital Cash Rider Claims:

  1. Copy of Policy Document
  2. Duly Filled form of claim
  3. Policyholder’s Photo ID
  4. Policyholder’s Address Proof
  5. Certificate of Medical Practitioner Attending the patient
  6. Medical Reports
  7. Photo ID of Nominee
  8. Nominee Address Proof etc.

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Below are some of the Hospital Cash rider exclusions:

  1. It excludes pre-existing diseases
  2. The rider excludes medical conditions that are hereditary in nature
  3. It excludes weight reduction treatment
  4. Also excludes hospitalization out of India
  5. Exclude self caused injuries and attempt to suicide
  6. The plan also exclude issues caused due to drug abuse/overdose

6 Things Excluded from your Hospital Cash Rider

Here is a list of a things to take note of regarding the hospital cash rider:

  1. The Hospital Cash Rider cannot be purchased alone. It can only be purchased with your base term insurance policy
  2. The rider has no individual waiting period of its own but follows that of the base plan
  3. It is available with a vast options of premium payment including monthly, quarterly, yearly, etc.
  4. You need to pay an additional amount to avail the hospital cash rider
  5. The rider expires with the expiry of term plan
  6. The rider is not compulsory to buy with a term insurance policy. The policyholders are free to add the rider if they find it beneficial

To Conclude

The hospital cash rider is a beneficial addition to your term insurance plan. If you are undecided whether to opt for this rider or not, the above points can help you in making the choice easy.  It is up to the discretion of the policyholder to add or avoid this rider under your term plan. However, buying this plan allows financial as well as mental security to the insured.

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FAQs on Hospital Cash Benefit Rider

What is a hospital cash benefit?

A hospital cash benefit is an optional add-on or rider to a health insurance policy that pays a fixed amount or daily cash benefit if the policyholder is hospitalized for a certain period of time. The cash benefit can be used to cover various expenses incurred during hospitalization, and provides additional financial support to the policyholder and their family.

What is this claim for hospital cash benefit?

A claim for a hospital cash benefit is a request made by a policyholder to their insurance provider for payment of the cash benefit amount that is included as a rider or add-on to their health insurance policy. The policyholder must submit the relevant medical documents and bills as proof of hospitalization for the required period, along with the claim form provided by the insurance provider. Upon verifying the authenticity of the documents and claim, the insurance provider will release the cash benefit amount to the policyholder. The claim process and requirements may vary depending on the policy terms and conditions, so it's important to carefully review the policy document and understand the claim process before making a claim.

What is the hospital's daily cash limit?

The limit of hospital daily cash is the maximum amount of cash benefit that a policyholder can receive per day during their hospitalization as per the terms and conditions of the health insurance policy. The limit varies depending on the policy terms and can range from a few hundred rupees to several thousand rupees per day. The actual limit may be determined by factors such as the type of policy, the policyholder's age and health condition, and the premium paid for the policy. The limit may be set in such a way as to ensure that the policyholder receives adequate financial assistance for the duration of their hospital stay, while also controlling the overall cost of the insurance policy.

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Sep 08, 2022
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PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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