What is Daily Hospital Cash - DHC Plans?

Rising health care cost has made health care accessibility a significant concern for an individual. Sudden illness, accident, or injury can leave you financially hurt and mentally stressed. Daily hospital cash plans help provide you control in such situations. It is a payment made to the policyholder for each day's stay in the hospital. It helps save money as well as meet various other miscellaneous expenses.

Whenever an insured is hospitalized, he gets a specified amount of money for each day he is in the hospital. There are different names for the DHC plan - Daily Hospital Cash, Hospital Cash, or Hospital Cash Benefit. They all work in the same way.

It is different from a health insurance plan. The health insurance plan covers your hospitalisation expenses, doctor’s fees, room rent, cost of diagnostic tests, etc. The daily hospital cash plans provide the amount based on the number of days you are admitted in the hospital. The payout under the DHC depends on the policy terms and conditions. It is not linked to actual hospitalisation expense. Further, the amount received under daily health cash can be used in whatever way the insured wants.

It is an add-on amount the insured receives over and above the hospitalisation expense. For example, Anil has a health insurance policy of Rs. 5 Lakh and an additional DHC of Rs. 3000. If he is hospitalized for 5 days and hospitalisation bill amounts to Rs. 40,000. In this case, the insurer will reimburse Rs. 40,000 as hospitalisation expense and will provide an additional Rs. 15000 as DHC for 5 days of hospitalisation.

Advantages of Daily Hospital Cash (DHC) Plan

1. Earn cash while hospitalized

The insured can earn cash during the hospital stay, and it can be used in any way he feels fit. It can be used to settle hospitalisation expenses or meet miscellaneous expenses, like travel expenses, household expenses, etc. There are various incidental expenses that one has to incur during hospitalisation, such as expenses related to eatables and conveyance of attendants, etc. You can use the amount under the DHC plan to meet such expenses.

2. Save no-claim bonus

The amount of DHC plan can be used to avoid making a claim under health policy and thus enjoy a no-claim bonus for that year. For example, Mr A has two to three days of hospitalisation, and the hospital bill is not huge. He can pay the bill using the DHC plan and not use his health insurance policy. Thus, the DHC plan helps you clear the hospital bill and also keep your no-claim bonus intact.

3. Miscellaneous benefit

One can buy the plan for self or for the entire family members. Usually, a certain discount is given when more than one family member is covered under the same plan. Some daily hospital benefit plan may also reimburse hospital bills related to accidents.

Features related to daily hospital cash plans

1. Choose the amount: In a health insurance policy, one has to choose the sum assured. But, in the DHC plan, one has to select the daily amount. Most DHC plans have a daily benefit amount ranging from Rs. 500 to Rs. 3000 to choose from. 
2. Type of plan: Hospital cash benefit may be offered as a stand-alone, part of health insurance, or rider in some plans. The stand-alone plan does not generally compensate for the actual cost of treatment. Thus, the premium is quite low. Some insurers provide the daily cash benefit as part of their feature. In such plans, along with coverage for treatment and hospitalisation cost, a fixed amount is paid for every day of hospitalisation. Some plans also offer it as an optional rider. To avail this benefit, you may be required to pay the extra premium.
3. Nature of hospitalisation: The payout also depends on the nature of hospitalisation. The cash received for general hospitalisation may be less as compared to ICU hospitalisation. The daily benefit amount may double if one gets hospitalized in the ICU. In case of minor surgeries, it may be 5 times the daily limit, whereas, for major surgeries, the benefit can be 20 times of the DHC chosen.
4. Minimum hospitalisation period: To claim coverage under a health insurance policy, the minimum of 24 hours of hospitalisation is required. Similarly, to receive benefit under the DHC plan, you may need a minimum of 48 hours of hospitalisation.
5. Limit on the number of days: There is also a limit on the number of days in which the provision is offered during hospitalisation. There may be capping of 30/40/60 days of hospital stay, and ICU stay may be capped at 10 days. Thus, the day limit can range anywhere from 30 days to 180 days depending on the insurer.
6. Exemptions/Restrictions: Exemptions might be available for daily cash benefit. Planned hospitalisation or emergency hospitalisation might not be covered. There may be only a few daily cash plans, which offer benefits for maternity and childbirth. Before you choose a plan, it is imperative that you understand the differentiation and restrictions.

List of few daily hospital cash plans:

1. Royal Sundaram Smart Cash Plan
2. SBI Health Hospital Daily Cash Plan
3. Chola MS Hospital Cash Healthline
4. ManipalCigna ProHealth Cash Plan
5. Future Generali Hospicash Plan
6. Tata AIG Individual Accident and Sickness Hospital Cash
7. Universal Sompo Hospital Cash Plan

Daily cash benefit should not be considered as a replacement of a health insurance policy. It is merely to complement your regular health insurance plan. At first, buy a comprehensive health plan (individual or family floater). Thereafter, obtain a daily cash plan to cover out-of-pocket expenses incurred during hospitalisation. Also, understand the terms and conditions of the plan/rider before making the purchase. Your purchase should be based on the coverage and the deductibles too. The daily hospital cash plan should always be taken as an add-on benefit to supplement health care cost, along with a comprehensive health insurance plan. 

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