Hospital cash riders explained: Turning term insurance into living cover

Service offers daily payouts to cover income loss during hospitalisation

A term insurance policy is bought to secure families but with insurers introducing hospitalisation benefits, also known as hospi-cash, the product has expanded to protect policyholders’ income.

 

According to Policybazaar.com, the feature ensures that the people insured receive a fixed cash benefit for each day of hospitalisation.

 

What’s hospi-cash

“The insurer pays a fixed benefit amount in case the life insured gets hospitalised. The amount is given each day from the first day of hospitalisation but a minimum stay of 24 hours is mandatory,” said Varun Agarwal, head of term insurance at Policybazaar.com. “This helps cover income loss and ensures the family doesn’t have to worry about expenses during treatment,” he said.

 

In essence, hospi-cash adds a layer of income protection to a pure-risk policy, helping meet non-medical expenses such as transport, meals, or daily bills that health insurance may not cover.

 

How hospi-cash works

According to the Policybazaar data, Tata AIA’s Hospicare Rider and Aditya Birla Sun Life Insurance (ABSLI)’s Hospital Care Rider follow a simple structure:

 

Feature	Tata AIA Hospicare Rider	ABSLI Hospital Care Rider
Minimum hospital stay	24 hours	24 hours
Waiting period	30–90 days (longer for pre-existing diseases)	90 days (except accidents)
Accident cover	Immediate	Immediate
Claim process	Intimation → Submit documents → Verification → NEFT payout	Intimation → Submit documents → Verification → Settlement in 2–3 days
Documents required	Discharge summary, bills, reports, claim form	Discharge summary, bills, reports, claim form

 

Hospitalisation often disrupts income, especially for self-employed individuals and professionals without paid leave. The rider acts as a financial bridge, offering daily cash that can range between Rs 1,000 and Rs 5,000 per day, depending on the insurer and plan.

 

By combining traditional term protection with hospitalisation support, insurers are addressing a growing consumer need for living benefits, coverage that pays out while the policyholder is alive.

 

Hospital cash riders like Tata AIA’s Hospicare and ABSLI’s Hospital Care Rider offer practical, short-term financial support during hospital stays. For many households, this could be the difference between dipping into savings and staying financially stable during recovery.