Health Insurance Riders: Do You Need Them?

Deepak has been thinking about purchasing another health insurance policy since his current one does not cover some of the requirements he wants for him and his family. His wife suggested that instead of buying a separate policy, maybe he can ask the insurance company if his policy has the option of including some of his requirements as additional covers. Not being familiar with this concept, he is confused about which will be beneficial for him (medically and financially) - taking another policy or adding more covers to the existing policy.

Should Deepak just invest in a separate policy? Will that cost him less than investing (and adding to his existing premium amount) in covers that the insurance company may offer?

Most of us are familiar with what health insurance policies are. It is designed to protect insurers by providing various kinds of medical plans. There are numerous policies to choose from, offered by various insurance policies. However, sometimes the basic plans may not cover certain requirements that you may want from the insurance policy. This can be anything-from the amount of coverage, the benefits offered, the period of time, and so on. This is where insurance riders come in handy. These refer to amendments to the coverage terms of a general health insurance plan. This is almost like a customization of an existing policy to suit the needs of the insurer. A rider will act as an additional benefit that is an add-on to the health insurance policy selected. You can add riders to the policy and your policy will take shape according to your needs and, here’s the best part, at a very low price. IRDAI, the insurance regulator, has set a limit on the premium for riders. This is at 30% of the basic insurance policy.

Before getting into why you may need insurance riders, let’s look at the existing types:

• Hospital Cash:One of the most common riders that many opt for, this provides coverage in the form daily cash if the insurer needs to take care of hospital expenses or any other related hospitalization expenses. The total daily cash amount will be paid once during the complete tenure of the insurance policy by the insurance company. It can be used the number of days as specified in the insurance policy.

• Room Rent Waiver: For those looking for a higher sub-limit or no limit, can opt for this rider in their insurance policy. Generally, policies will have a set amount on room rent depending on the nature of the room (general, semi-private rooms). This waiver allows the insured to avail the hospital room of one’s choice without having to pay any additional admission fee.
• Maternity Rider: This rider allows extensive coverage for expenses that are borne during child birth. This is applicable only after the waiting period is over which could be more than 24 months, depending on the nature of the insurance plan opted for. There are some companies that will also offer coverage for the child after its birth till the end of the maturity period.

• Personal Accident Waiver or Double Indemnity Waiver: This rider deals with compensating the insured for accidents occurring during the policy period. This could be permanent partial disablement, total disablement (temporary and permanent) and accidental death. This cover can be added to the basic insurance plan and the cost incurred is not too high. This rider will include covering medical expenses that might be required for the injury or disability caused due to an accident. This helps one stay prepared in case of unexpected expenses. In case of death, the insurance company also provides an additional amount called the death benefit where the insured’s family gets twice the amount of what has been mentioned in the policy.
• Critical Illness Rider: This, as the name suggests, covers medical expenses dealing with any illness or disease that might be critical in nature. This includes kidney failure, heart attack, cancer, organ transplant, and so on. There are a number of insurance companies that provide such a cover with their plans. The insured will have to purchase this cover since it is not part of the basic plan that is offered. What this rider does is provide a lump sum to the insured irrespective of what the total medical expense incurred is during the treatment. Some policies will offer a comprehensive list of illnesses that the rider covers and this can be between 10 and 38 critical illnesses.

Here are some examples against each Health Insurance rider type:

Health Insurance Rider Type	Health Insurance Policies
Hospital Cash	SBI General Hospital Daily Cash Insurance Plan Max Bupa Health Companion plan
Room Rent Waiver	ICICI Lombard Complete Health Insurance Policy Bajaj Allianz Family Care First Plan
Maternity Waiver	The New India Assurance Family Floater Mediclaim Policy Star Wedding Gift ICICI Lombard Health Advantage Plus
Personal Accident Waiver or Double Indemnity Waiver	Accident Care Individual Insurance Policy Bharti AXA GI’s Personal Accident
Critical Illness Rider	ICIC Pru iProtect Smart Life Cover Plan HDFC Life Illness Cover IIFCO-TOKIO Health Policy

So why do we need an Health insurance rider?

• Paying off debts: Insurance riders are often used as a way to pay off debts. In case of critical illnesses, the death benefits offered under Personal Accident Waivers, allows the insured to collect a lump sum of money that is double of what is mentioned as the policy amount. This helps cover some of the existing. Some insurance companies also offer family income rider where the debt payments are done on a periodic basis, depending on the nature of the policy. An accidental death benefit rider is also good since it doubles the amount under the Death benefit clause. The extra amount received is good for paying of loan debts, mortgages, etc. Some companies will also offer disability income riders which can be a source of income and those with disabilities can pay off their outstanding debt amounts easily.
• Paying for a funeral expenses: Sometimes the amount received on the death of the insured can cover the cost of the funeral. Insurance companies have very recently added this feature under their health and personal accident policy. This is generally part of micro insurance policies. Future Generali, for example, charge a small amount of premium for this benefit. Most companies will offer a benefit of Rs 10,000 or 1% of the sum assured. Bajaj Allianz charges Rs 5 against their personal accident for funeral expenses. Bharti AXA General Insurance has tied up with Arohan to also provide this rider (mostly NGOs or tie-ups with NGOs will enable such a feature as a rider).
• Paying for your child’s education: The lump sum received from some of these riders can be used to pay for your child’s future. This can be school, college and further studies. It’s a good way to save and have a more secured future for the child.

Health insurance riders are not just meant to cover medical conditions and hospitalization but also provide a lot of security for unforeseen circumstances in the future. Riders offer different kinds of benefit and purchasing them will not only help in having a better insurance policy, but the cost incurred is minimal considering the wide range of benefits these provide.