Benefits of Health Insurance Add Ons Online in India

Every individual has different health insurance needs. Whether it is the kind of health plan, the sum insured, the coverage or benefits attached to plans – one size fits all approach does not work in the case of health insurance. 

E.g. Manoj has a family floater plan of Rs 5 lakh but he wants to increase the coverage. He believes that his existing cover will be insufficient. He is considering buying a new policy that provides more coverage. However, his friend suggests buying riders/or health insurance add-on covers instead of buying a new policy. That’s when Manoj is introduced to the world of insurance riders or add ons. In this blog, we’ll discuss:

• What are health insurance add on covers?
• What are the different types of riders?
• Benefits of health insurance add ons
• Factors to consider when buying health insurance add ons

Related article: A Layman’s Guide to How Health Insurance Works

What are health insurance add on covers?

Health insurance riders are add-on benefits that can be included as a part of existing health insurance plans. Adding riders to basic health insurance plans can increase the coverage and sum insured, at affordable premiums. The IRDAI has set a limit on premium on riders at a maximum of 30% of the basic insurance plan.

At times, basic health insurance plans do not provide coverage for specific needs that a policyholder might have. That’s why riders come in handy for additional specific coverage. It is as good as customizing your existing policy and making it more comprehensive to meet your requirements.

What are the different types of riders?

Room rent waiver

Comprehensive insurance plans provide coverage for room rent. However, typically, insurance companies put a cap on the amount of room rent. It is either a fixed predefined amount or a percentage of the sum insured. With a room rent waiver rider, the policyholder can opt for a room of their choice without worrying about the limit allowed.

Maternity cover

Maternity add-on provides coverage for maternity related hospitalization and medical expenses. It should be noted that maternity rider can have a long waiting period, from 12 months to four years. It depends on the insurance company’s clauses. Maternity riders might also have sub-limits, which imply that the rider would provide coverage up to a predefined amount or percentage of the sum insured. 

E.g. Manisha has a health cover of Rs 4 lakh with a maternity coverage rider. The policy specifies a sub-limit of 5% for maternity, which means Manisha can claim only up to Rs 20,000 towards her maternity expenses.

Critical illness cover

Synonymous to its name, this rider provides additional coverage towards medical expenses for the treatment of critical illnesses. Some of the critical illnesses commonly included are kidney ailment, cardiovascular diseases, heart attack, cancers and more. This rider provides a lump sum amount upon the diagnosis of the critical illness. Different insurance companies provide coverage for different critical illnesses. Some may include lesser number of illnesses compared to others. 

Hospital cash

Hospital cash rider provides daily cash to the policyholder when hospitalized for medical expenses. This can also be a kind of allowance for loss of income during that period. This rider benefit is paid by the insurer once during the tenure of the policy. The number of days for which it can be used is pre-defined in the policy. This rider is not applicable if the policyholder is not hospitalized and only receives day-care treatment. The amount remains fixed for the policy period and cannot be changed unless mentioned and allowed in the policy clauses.

Personal accident rider

Also known as the Double Indemnity Waiver, this rider provides coverage for medical expenses incurred towards injury due to accidents. It includes permanent total disablement, temporary disablement, permanent partial disablement or accidental death. In the case of the death of the policyholder, the insurer provides a death benefit to the family of the policyholder. This rider can be beneficial to policyholders who have dependents and debts. In case of their sudden death, the lump sum amount offer to their family can be utilized to meet any expenses that the family may occur. 

Benefits of health insurance riders

Health insurance riders have many benefits. For starters, they provide the opportunity to customize health insurance plans and help make insurance more beneficial. Let’s look at some of the key benefits:

Riders provide extra coverage

Every individual’s healthcare needs are different and hence their health insurance needs would be different. For example, a person who has a weak immune system and is prone to falling sick often may need to get hospitalized frequently. For such a person a room rent waiver or hospital cash rider would be beneficial and provide extra coverage.

Making quality healthcare affordable

Riders make quality healthcare more affordable. For example, a room rent waiver rider would ensure that the policyholder can choose a hospital room of their liking without having to worry about the room rent limits in the policy. 

Tax benefits

Riders, like the basic health insurance premiums, provide tax benefits. A policyholder can save more tax money by purchasing health insurance riders, since riders are also eligible for tax benefits under Section 80D of the Income Tax Act.

Riders allow customization of basic health plans

There are different types of riders. Policyholders can choose the different types of riders that they want to buy and customize their health insurance policy to align with their needs.

Factors to consider when buying health insurance add ons

• Riders come at added costs and hence a policyholder must think carefully before buying a rider. Do they really need that rider? Will that rider actually make a difference to their healthcare planning? Only if the rider would benefit must they buy it, or else it would be an added expense without proportionate benefits.

• Couples who want to buy a maternity rider must plan well in advance as maternity riders have a long waiting period. Typically, maternity riders have a waiting period ranging from 12 months to 4 years and hence it has to be a planned decision. For example, if a couple plans to start a family in the next 2 years and the rider have a waiting period clause of 3 years, then it is pointless to buy this rider.

• Riders provide tax benefits just like basic health plans do. Those who want to save more taxes could consider riders. However, tax saving should not be the only motive for buying riders. Policyholders must buy riders only if they are really required to cover their healthcare needs.

• All insurers do not provide riders with all insurance plans that they offer. Hence it is important for the policyholder to find out if the insurer allows options for riders and then purchase a policy. Buying riders should be a planned and well-thought decision.

Over to you

By now you know riders can be beneficial for some depending on the healthcare needs. You also know the benefits and the key points to keep in mind when buying riders. Are you considering enhancing your current health plan with riders? It is a wise decision. Make it an informed decision, too.