Updated on 23 Dec 2025
Even with a good health insurance policy, some expenses during hospitalisation will always be uncovered. These are the out-of-pocket costs that can add up quickly and become stressful for families. This is where a daily hospital cash plan comes to help. It works as an extra financial support that covers expenses that a regular health insurance policy does not include.
What are out-of-pocket expenses?
Hospitalisation incurs several expenses that are outside the scope of hospital bills. There are certain non-admissible expenses like the charges for documentation, establishment, AC, attendant and many more, which the insurer doesn’t reimburse. Apart from these, there are other costs related to eatables, dietary supplements and commuting of family members and relatives, which you should pay from your pocket.
What is hospital cash insurance?
Hospital cash insurance provides a fixed daily allowance when you are hospitalised for over 24 hours, helping cover extra expenses like food, travel or loss of income that regular health insurance may not fully address. Some insurers include it in standard health policies, while others offer it as an add-on or standalone plan. The hospital cash insurance payout is given regardless of the actual hospital bill and can be used at your discretion.
Benefits of daily hospital cash insurance
The benefits of daily hospital cash insurance are:
- Hospital stays come with expenses that are not related to medical care. Daily cash allowance helps you manage such charges, like the cost of food for the family, travel, toiletries, etc.
- If you or a caregiver needs to take a break from work without pay, hospital cash can help cover the lost income. This is especially useful for self-employed people.
- Daily cash plans often double the payout if the patient is admitted to the ICU. This helps manage the higher costs of crucial care.
- If your health insurance policy has a high deductible or the coverage limit is exhausted, daily cash plans can cover additional costs without financial stress.
- As the money is paid directly to you, you are free to use it as needed. It does not depend on the actual bills submitted.
- For small hospitalisations, you can use hospital cash and avoid claiming from your main health insurance policy. This helps keep your NCB intact, which reduces premiums during future renewals.
- To receive the daily cash payout, you usually need less paperwork. Admission and discharge summaries are often sufficient, making the process simpler than reimbursement claims.
- Premiums paid towards daily hospital cash plans allow for tax deductions under Section 80D of the Income Tax Act. This provides additional savings while securing extra protection.
Conclusion
Daily hospital cash plans help manage the extra costs that come with hospitalisation. It provides cash support for secondary expenses, loss of income or situations where your major health insurance policy does not cover the full amount. This cover is useful for individuals and families. When combined with a health insurance policy for family members, it adds an extra layer of financial protection during medical emergencies.
While you focus on safeguarding your family’s health, let us help you build stronger financial protection. Get customised health insurance advice by filling out the form provided on this page.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis or treatment. Please consult a certified medical and/or nutrition professional for any questions. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.