Insurance plan riders are useful additions to your basic insurance cover. A rider is a contributed clause to an insurance policy that provides additional coverage and beneﬁts. Many insurers now charge an extra fee for rider customisation. For that matter, riders greatly expand the scope of your standard insurance policy. For instance, you can supplement your health insurance with pregnancy coverage.
But do you need a rider in the ﬁrst place, given that most policies include basic coverage, which covers fundamental health causes already? Well, your standard policy may not cover certain situations. Add-ons or coverage riders come to your rescue in these situations, giving increased and more tailored coverage.
The following are some common sorts of health insurance riders available out there:
Room Rent Waiver: You can choose a room with a larger sub-limit, or one with no sub-limits, if you include the room rent waiver rider in your policy. Many insurance companies set a ceiling on room rent, and cover general/standard or semi-private rooms as part of their policies. You can get a room of your choice without paying extra at the time of entry, if you add the room rent waiver rider.
Maternity Beneﬁt Cover: After the waiting period has passed, this rider oﬀers coverage for expenses spent during childbirth. Depending on the insurance company and your insurance plan, the waiting period could be up to 24 months. Some insurers also oﬀer coverage for new-born babies from the time they are born, until the conclusion of the policy term, or maturity.
Critical Illness Rider: Any condition or ailment that is terminal in nature, such as a massive heart attack, kidney failure, organ transplant, cancer, tumour, or multiple sclerosis, is classiﬁed as a critical illness. Some insurance companies include critical illness coverage in their plans, and policyholders can also purchase it as an add-on to their existing policy. Regardless of the overall expenses paid during the actual medical treatment, the critical sickness cover gives an upfront lump sum payment amount. Many insurers oﬀer critical illness riders for 10-15 ailments; however, in case of comprehensive policies, an insurer may cover up to 38 critical illnesses, depending on the ﬁrm and the policyholder’s needs.
Hospital Cash: This rider covers the daily cash that a policyholder may need to cover hospital and other medical expenses while in hospital. This hospital daily cash incentive rider will be paid by the insurance provider once during the term of your coverage, and can be used for the number of days speciﬁed in your health care plan.
Personal Accident: This rider covers all types of accidents, including total permanent disability, accidental death, permanent partial disability, and temporary total disability. Personal accident coverage can be added to your basic insurance plan for a small fee. This waiver covers medical expenditures as well as any disability or injury sustained in an accident, and can be used to cover any unanticipated expenses. The double indemnity rider is another name for the personal accident rider. If the insured person dies in an accident, the insurance company will pay a higher death beneﬁt. As a result of death due to unintentional bodily harm, the policyholder’s family receives twice the value of the policy.
How Can Policyholders Choose Riders Eﬀectively?
Insurance ﬁrms oﬀer a variety of riders to give better risk protection to policyholders. You can select from several riders based on their relevance and signiﬁcance. The riders are included to help safeguard your ﬁnancial interests and those of your dependents. Here are a few points to keep in mind.
1. You should be aware that the total amount of premium collected under various riders should not exceed 30 per cent of the base plan insurance premium. The maximum amount for health riders is 100 per cent of the basic premium.
2. You should understand the terms of the rider plan, the sum assured, and other elements that aﬀect the insurance coverage, before purchasing a term insurance policy. After the policyholder reaches the age of 65, insurance companies do not issue riders.
3. Some insurance companies and plans only allow rider additions when the policy is purchased, and additional rider additions are not permitted when the policy is renewed. While purchasing the policy online, you may not be able to add all the riders.
4. The term of the rider should not be longer than the policy term. The total amount insured by all riders should not exceed the total amount insured by the base premium.
5. Riders are a terriﬁc way to make insurance policies more personalised. Insurance ﬁrms create a variety of policies to meet the needs of the general public. Since the basic plan will not meet the needs of people in a variety of ﬁnancial and health situations, riders give policyholders another way to get the most out of their insurance policy. As a result, you should be able to assess your existing and prospective risks, and subscribe to the appropriate riders without fail.
6. You will beneﬁt from tax beneﬁts under section 80D of the Income Tax Act, 1961 if you choose a critical illness or health-related rider.
7. If you want to buy diﬀerent insurance policies from diﬀerent ﬁrms, you should understand the terms and conditions that apply while claiming the coverage. The claims process should be easy in order to eﬃciently serve the insurance policy’s goal.
The author is chief executive officer and whole time director at Medi Assist.
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)