Insuring a smooth ride: A closer look at insurance riders

If you are planning to buy a health insurance policy or already have one, chances are you have heard of terms like add-on covers and riders which refer to additional benefits offered with the basic plan.

Jul 23, 2015 06:07 IST IIFL Sarika Kodag |

Insurance
If you are planning to buy a health insurance policy or already have one, chances are you have heard of terms like add-on covers and riders which refer to additional benefits offered with the basic plan. Riders expand your insurance coverage at affordable rates and in line with your needs. Given the plethora of insurance riders, people are often confused about which one suits their purpose best. As the buyer, you alone are in a position to make the best choice but for that you need to know what a rider is and what it offers you. 
 
Let’s take a cursory look at a few health insurance riders:
 
Maternity Cover
 
This rider covers maternity expenses incurred during child birth provided the insured person completes the waiting period successfully which could be two year or more based on the type of policy. Some healthcare plans have an option to insure new-born babies, from birth till the end of policy period. Premium increases by around 20 percent if you opt for this rider.
 
Hospital Room Rent Waiver
 
This rider allows you to opt for a hospital room with a higher sub-limit or without sub-limits. This way, one can stay in a better room during hospitalization without any extra financial burden. It especially comes handy if you are undergoing medical treatment in urban areas where hospital room rents are invariably high.
 
Hospital Cash
 
Many a times, daily cash flow is required during hospitalization to pay for medical expenses. This rider offers just that, helping you claim benefits anywhere up to certain limits based on policy type and your medical condition. The policyholder is eligible for the payout only if he/she is hospitalized for at least 24 hours.
 
Critical Illness Benefit Cover
 
Critical illness health insurance rider is introduced to pay off your medical expenses in case of serious illnesses like heart attack, cancer, paralysis, coronary artery bypass surgery, major organ transplant (e.g. heart, lung, liver, pancreas), stroke, kidney failure etc. During the policy tenure, if insured is diagnosed with any such diseases, then the amount equal or less than the sum assured is payable to the policyholder within a specified number of days.
 
But the diagnosed disease must be within the purview of the insurer’s defined categories. It is suitable for those who don’t want to take any chance with certain health conditions, especially if they have a medical history and/or dependents. Amount paid by any mode other than by cash for this cover is eligible for relief under Section 80D of the Income Tax Act.
 
Riders serve best when the cost of new or additional requirements can be estimated with reasonable accuracy. So assess your needs, compare available options and then make a good decision. Happy insuring!

Related Story