Hospital Cash Benefit 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.