What Is Hospital Daily Cash Benefit in Health Insurance
Written by Upstox Desk
3 min read | Updated on June 16, 2025, 12:35 IST
Hospital Daily Cash Benefits
Who Should Consider This Benefit?
FAQs
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When Mr. Joshi fell seriously ill, his doctor advised immediate hospitalization, stating that his treatment and recovery would take time. Concerned, he called his daughter, who lived in another city, for work. He said, “I think I should just get admitted for the procedure and monitoring period, then come home for the rest of the recovery.” Worried, his daughter asked why he wouldn’t stay in the hospital longer, especially since he had good health insurance.
Mr. Joshi replied, “It’s not just about my expenses. Your mother will be staying with me—her expenses must also be considered.” Understanding his concern, she reassured him, “Your health should be your only priority. But knowing you, I ensured your policy includes daily cash benefits. It covers those extra expenses up to a set limit, so there’s nothing to worry about.” Proud and emotional, Mr. Joshi said, “You are a good CA—and an even better daughter.”
When it comes to health issues and medical procedures, the medical bills can pile up way faster than the patients recover. People often skip the most crucial parts of medical treatments due to the fear of these huge bills, such as recovery. Generally, what adds up the most in these bills are the daily expenses associated with the attendant and other ancillary expenses not covered by the standard health insurance policy.
Hospital Daily Cash Benefits
To relieve the policyholder of the burden and ensure that they do not have to choose between health and money, most health insurance policies come with Hospital Daily Cash Benefits. The insurance company pays these fixed daily allowances over and above the actual hospitalization expenses covered by the standard health insurance policy. Here is how it works
Minimum 24-Hour Hospitalization
The first pre-requisite to be eligible for daily cash benefits is that the patient should be hospitalized for more than 24 hours. If the patient is admitted for less than 24 hours, then they cannot make any claim under the benefit.
Fixed Sum Assured Per Day
The amount claimed under daily cash benefits is pre-decided and fixed. The benefit is provided in terms of the amount and nature of expenses eligible and is typically mentioned in the policy terms. Generally, the benefits cover incidental expenses such as transportation, food for attendants, or non-medical items not covered by regular insurance.
Duration Limits
The number of days for which the policyholders can claim daily benefits is mentioned in the policy terms. It is the maximum number of days to which the benefit can be claimed. In most cases, it is up to 30 days. But it is always good to confirm the actual number beforehand.
Cashless Or Reimbursed
Hospital daily cash benefits can be paid either cashless or reimbursed. However, typically, it is a reimbursed benefit. So, you must pay for the hospitalization expenses first, then file a claim separately. Once your claim gets approved, the insurer will pay you a fixed amount per day for your hospitalized days.
Who Should Consider This Benefit?
While having the daily cash benefit in addition to a traditional health insurance policy is usually a good idea for everyone, people with the following circumstances should not avoid it at all:
People Without Income Replacement
If you are someone who does not have any income replacement during the hospitalization period, then hospital daily cash benefits are a must for you. These are generally salaried employees or self-employed individuals who are unpaid while hospitalized. Having the benefit ensures that you have a substitute for lost daily income.
Families Relying On A Single Earner
If you are the sole earner of your family, you should never ignore having daily hospital access benefits. With the sole earner in the hospital, the financial health of your family will be in shambles. Your family may struggle with everyday expenses. However, having this benefit can ensure your family has a steady daily amount to manage essentials.
Those Who Travel For Treatment
If you get specialized treatment for which you must travel, your expenses will skyrocket. Even when treatment is done in the hometown, the caregiver has to incur many expenses. However, traveling will require additional travel, food, and accommodation expenses for patients and caregivers. Daily cash helps ease those out-of-pocket costs, at least to an extent.
FAQs
Can I later add a hospital daily cash benefit to an existing health policy?
Many insurers allow adding the benefit during policy renewal or as a rider, depending on underwriting approval.
Does the hospital's daily cash benefit vary based on room type or tier?
No, the benefit is fixed and not influenced by hospital room category or classification. It's based on your policy terms.
Are there any exclusions under the hospital's daily cash benefit?
Exclusions may include pre-existing conditions, maternity-related stays, or hospitalizations under observation without active treatment. Check your policy document for details.
Can I claim hospital daily cash for ICU stays as well?
Yes, some policies offer a higher per-day payout if the insured is admitted to an ICU during hospitalization.
Is hospital daily cash taxable under Indian tax laws?
No, payouts received under hospital daily cash benefits are typically not taxable as they are considered reimbursement, not income.
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Upstox Desk
Upstox Desk
Team of expert writers dedicated to providing insightful and comprehensive coverage on stock markets, economic trends, commodities, business developments, and personal finance. With a passion for delivering valuable information, the team strives to keep readers informed about the latest trends and developments in the financial world.
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