The difference between Health Insurance and Hospital Cash Plans | Tips & Advice


The difference between Health Insurance and Hospital Cash Plans: Many people who consider for the general health insurance do not pay for hospital cash plans as they think that former would cover all the health related expenses.

Though both help you to pay for your health care needs they are totally different. Health insurance covers only the cost of medical treatment or expenses acquired by the policy holder.

Whereas Hospital Cash Plan is a daily cash benefit insurance policy that assists the policy holder to meet all his/her miscellaneous expenses during the period of their hospitalization which are generally not covered in the regular health insurance.

Health insurance sometimes can also be used to include insurance which covers disability or long term care needed for the patient. It is either provided by government sponsored social insurance programs or from private insurance companies.

It can be purchased by an individual consumer. Whereas the reimbursement provided by the hospital cash plan does not cover the cost of medical expenses and medical treatment. Hospital cash plan insurance policy acts as a supplement to the health insurance policy because it provides benefits of cash intended towards:

• Patient’s special diet expenses.
• To and fro conveyance to the hospital by the family members and visitors.
• Extra bed charges for people staying with patient.

The instantaneous benefit obtained by opting for a hospital cash plan is that you save your income tax. The premium which you would have to pay for the plan is eligible for tax deduction under Section 80D of Income Tax.

It can be availed for the persons between the age group of 1 to 60 years at the beginning of the plan and renewal accepted up to 70 years. The policy provides daily help also for hospitalization due to terror attacks.

Therefore, in short we can say that health insurance is used to pay your medical expenses whereas hospital cash plan is used to pay all your hospitalization charges.

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