Health insurance is an essential investment option for every individual. This fact has been highlighted by the recent pandemic when there were many cases where individuals could not afford the treatments for themselves or their family members. Health insurance is the safety net against huge medical expenses and helps individuals in getting timely medical attention.
What is the meaning of health insurance riders?
A basic health insurance plan includes multiple benefits like covering for pre and post-hospitalization expenses, cost of medical treatment, doctor’s fees, cost of medicines, cost of health checkups, cost of an ambulance, etc.
Apart from these basic or standard inclusions, insurers also provide the option to include few additional benefits. These additional benefits can be specific to the needs of the individual and can be included in the existing plan instead of getting a separate plan for them. Such additional benefits are known as health insurance riders. The cost of getting these riders is less than getting a new policy. According to the rules laid by IRDAI in this regard, the maximum premium on the riders is capped at 30% of the basic health insurance plan.
What is the need for riders?
Health insurance riders are needed to meet the additional requirements of the insured individuals without the burden of an additional policy. Some of the common examples for the need of riders are mentioned below.
- To pay for funeral expenses
This is a relatively recent addition as a rider on health insurance and accident insurance policies. It is a smaller portion of the health insurance that is provided in the event of the death of the insured person and helps in taking care of the funeral expenses.
- To pay the outstanding debts
The additional cover received on account of a rider can help in paying off any debts or settling past dues. Some examples of additional payout due to a rider are,
- Additional cover on account of the death benefit on personal accident insurance where the amount received can be double the policy amount.
- Disability income riders where the insured person can get a steady source of income in the event of disability.
- To pay for a child’s education expenses
A lump sum amount received on account of any rider can be used to pay for the education of the children or their higher education thereby safeguarding their future.
What are the most important riders to be included with health insurance?
There are multiple riders that are available on health insurance. Some of the important riders that should be included in the health insurance plan are mentioned below.
- Room rent waiver
This rider allows the insured person to get an upgraded room in the hospital without additional costs. Such riders come with an increased limit for the room rent or no upper limit for the room rent at the time of hospitalization.
- Hospital cash
This rider provides the benefit of a fixed amount as hospital cash for each day of hospitalization. This cash can be used to meet the medical and non-medical expenses of the insured person or other persons included in the health insurance plan. Most insurers provide such hospital cash ranging from Rs. 500 to Rs. 3,000.
- Personal Accident rider
A personal accident rider is provided as an addition to the existing health insurance plan by many insurers. This rider provides compensation in the event of an accident leading to permanent total or partial disability or temporary total disembodiment as well as death due to the accident. The cost of this rider is not too high as compared to the benefit provided. The insured person can get coverage for the medical expenses too on account of the accident. In the event of accidental death, the coverage provided to the nominee is twice the policy amount.
- Critical illness rider
This rider is provided by multiple insurers to cover critical illnesses like cancer, heart attack, kidney failure, organ transplant, etc. Most policyholders prefer to take this rider as these critical illnesses are not included in the basic health insurance policy. This rider provides the benefit of a lump-sum payment of cover irrespective of the actual medical expenses.
What are the health insurance riders that can be avoided?
Many times investors purchase certain riders just by their names or without carefully analyzing the actual need or benefit of such riders. Some of such riders that can be avoided by individuals are mentioned below.
- Maternity benefits
Maternity benefits are provided as a rider on a majority of health insurance plans. However, the benefit of this rider cannot be in effect immediately after including it in the plan. The minimum waiting period for this rider to be in effect is approximately 4 to 6 years. A better option than this rider is the group health insurance plans or a separate plan for maternity.
- Surgical benefits
This is another additional rider on health insurance that can be avoided. If the insured person has a comprehensive cover, the cost of surgery is included in the hospitalization cost thereby eliminating the need for a separate plan.
- OPD benefit
This rider covers the outpatient treatment when there is no need for hospitalization. This rider can be avoided as the cost of this rider may exceed the benefit provided.
The sole aim of health insurance rides is to provide better coverage at reduced costs. This does not imply that the insured persons have to buy every rider offered by the insurer. They need to carefully analyze the need and the benefit of the rider and weigh it against the cost for the same. This will ensure that insurers do not take advantage of the individuals in the name of providing better cover.
1. Are health insurance riders mandatory for every individual?
A. No. Riders are the additional benefit provided by the insurer on an existing health insurance policy and hence are not mandatory for every individual.
2. Can the cost for additional riders be paid along with the premium for the basic health insurance policy?
A. Yes. The additional premium to be paid on account of additional riders is to be paid with the premium for the existing basic health insurance plan.
3. Is the health insurance premium increased on account of pre-existing medical conditions like heart ailments or diabetes?
A. Yes. The risk of insuring a person with pre-existing medical conditions like diabetes or heart ailments is higher than a person free from such conditions. Hence, the premium amount will be higher in the former case.
4. Can a person have multiple health insurance instead of including riders in the existing plan?
A. A person has the option to get multiple health insurance policies for themselves and their family members. But if the new policies are taken with the sole aim of providing additional benefits not included in the existing policy, the cost of such multiple policies will be higher than simply taking a rider on existing health insurance.