What is it?
It is a hospital cash policy that gives cash on hospitalization.
What do you get?
On hospitalization for at least 24 hours, the policy gives a pre-defined amount in cash for each day you spend in the hospital. In case of hospitalization in the intensive care unit (ICU), the amount is doubled. This cash is paid up to the limit of the sum assured you have chosen under the policy. The maximum number of days it pays for normal hopsitalization per year is 100; the limit is 50 in case of hospitalization in ICU.
The policy also provides family care benefit. Under the family care benefit plan, if two or more members of the family covered under the plan are hospitalized simultaneously, then the policy will pay a lump sum of Rs 10,000 in a policy year. This amount is exclusive of the sum assured chosen by you.
The policy comes for a fixed term of three years and the premiums, payable annually, are fixed for the term. At the end of the term a policyholder can renew the policy and get a discount of 2.5% on the premium.
The policy also gives a no-claim bonus (NCB) at every anniversary. You can accumulate an NCB of 5% of the basic sum assured (chosen initially) every year; but this can only go up to 40% of the basic sum assured. However, just as an NCB increases your sum assured, a claim will reduce it. According to the policy, in the event of any claim, the sum assured (which may have increased due to NCBs) will decrease by 10%. But it will not go below the basic sum assured. The policy also gives a family discount in the range of 5-10% on the premium if you choose to cover more than one person under the policy.
Watch out for
There is an initial waiting period of 30 days when you buy this policy. During this time, hospitalization due to an illness is not covered, but hospitalization due to an accident is. Even pre-existing diseases are excluded for two years as are certain defined ailments.
How to make a claim
The claim is settled through reimbursement after the patient is discharged. You will need to submit the copy of the policy document, claim form, age proof, treating doctor’s certificate, discharge card and a copy of all medical documents related to hospitalization. You will need to make a claim within 30 days from the date of discharge.
Mint money take
For a 30-year-old taking a sum assured of Rs 5 lakh, the annual premium fixed for three years is Rs 4,590; the daily cash entitlement is Rs 5,000. Cost-wise the policy makes sense but if you have a health insurance plan that will take care of your hospitalization expenses, then the only reason you would still need a hospital cash policy would be to get an income stream that the hospitalization may have disrupted. Keep in mind that this policy does not provide an income stream while you are hospitalized but after hospitalization.