Personal Finance: Health insurance riders and their relevance

There is enough stress laid on the importance of health insurance especially after the spread of havoc pandemic. Several initiatives are being taken up by the insurance regulators, insurance service providers, brokers and web insurance aggregators aiming to educate and create awareness about health insurance, its benefits and methods to buy the right health insurance plan for yourself and your family in order to be financially protected at the time of medical emergencies. But there is equally less significance given to the riders that are accompanied by all nature of health insurance plans including individual, family floater, critical illness and etc.

Indeed comprehensive health insurance plans are designed in a compact manner that provides a wide array of services such as medicines, diagnostic tests, doctor consultations, hospitalisation expenses, ambulances, daycare expenses, etc. However, insurance is a highly personalized product that people like to customize to fulfill their own requirements. While it is quite impossible to fit in all kinds of services in one plan due to monetary reasons and more. There are additional riders crafted that individuals can purchase to fulfill extra needs for medical assistance at their expense.

It is often reinforced that these additional riders are additional expenses as they come with an added cost that might make a health insurance plan expensive. But in reality, these riders are designed to provide additional coverage to the policyholder. And these riders can be extremely helpful and useful when they are selected with proper reasoning and relevance. To make the right selection of riders, it is crucial to understand that what does these riders are meant to deliver and who should buy them so that they can further strengthen their comprehensive cover plan and make the best out of additional money spent on these riders.

Thus let’s understand the relevance of each rider and who should buy them.

Room Rent Waiver: The health insurance companies have a clause on the expenses of hospital room rent, commonly known as a sub-limit that is paid by the insurance company. And in case the room rent expense exceeds the sub-limit, then the policyholder has to pay extra expenses from their own pocket. However, the Room Rent waiver rider helps in increasing or evading the sub-limit laid on the charges for the hospital room rent by the insurance.

Who should buy it: This rider actually takes off the burden of room rent expense if it exceeds the sub-limit. This rider helps you in taking a room of your choice including private & deluxe without paying any additional charges. Thus if the policy is taken for a senior citizen or a person dealing with a critical illness that may need hospitalization for a longer duration then they can think of buying this rider to completely remove the chance of pocket expense. Also, people who like their privacy can opt for this rider to select a private room of their choice without feeling its burden.

Hospital Daily Cash: Hospitalisation means the patient can’t go to a job or business that leads to the loss of income. This additional rider providers daily allowance to the policyholder during their stay in the hospital. There is some amount predefined by the insurance companies that the policyholder is liable to receive.

What should buy it: Hospital Daily Cash rider is similar to the daily income that policyholder receives when he/she is unable to work and help their family financially. This rider helps the policyholder in running day-day expenses as an income replacement. People who depend on daily wages or are the sole breadwinner of the family can go for this rider so that their family doesn’t suffer when they are hospitalized.

Consumable Cover Rider: This is a new age rider designed to meet the expenses of modern requirements of the treatment. This rider covers expenses of consumable items or only one-time use equipment such as gloves, PPE Kits, surgical items, etc that are generally not covered in the comprehensive health insurance plan.

What should buy it: This rider has been designed in the wake of COVID-19 where the need for consumable items increased drastically. Since such items are frequently required in the treatment and can lay a dent on the pocket of the insurance holder. Thus this rider helps in reducing the pocket expenses. People who are traveling for work or leisure and likely to get exposed to COVID-19 infection can plan to buy this rider to save themselves from any kind of medical expense.

NCB Protection: Non-Claim Bonus (NCB) is a benefit given to the policyholder when no claim is raised any medical claim during the policy year, in the form of additional coverage or discount on premium or additional sum insured addition. If the policyholder makes the use of a health insurance claim then the nonclaim bonus becomes nullified. However, this Non-Claim Bonus Protection rider ensures that the policyholder gets the non-claim bonus even when the medical claim is raised by the policyholder.

What should buy it: NCB protection can be taken by a person who knows that he/she will have to claim because of their health conditions and they will have to forgo their bonus. However, with this rider, the person can enjoy the claim as well as the bonus at the time of policy renewal.

Inflation Rider: Inflation is inevitable that happens every year including in the medical field which means the charges for medical services go up with market inflation. The inflation in the medical field can make the treatment difficult for policyholders to handle but this Inflation rider helps in managing funds for expensive treatments. This rider increases the sum insured amount on an annual basis with the Consumer Per Index Inflation Rate.

What should buy it: This rider helps policyholders in ensuring that their existing policy remains sufficient according to the rising inflation for the long term by automatically increasing the sum insured. With this rider, the policyholder doesn't have to purchase new health insurance and get into the hassle of paperwork or medical check-up for a new plan with a higher sum insured. People having family floater health insurance plans can leverage this rider to ensure that the sum insured amount is increased to meet the medical demands of the future.

Personal Accident Rider: Under this rider, a policyholder can protect himself/herself from accident-related mishap where the policyholder pays for the treatment of accident from own savings. The insurance rider pays a lump sum amount either to the policyholder or the nominee that can be used by them either for medical treatment or for personal expenses in the case of loss of income.

What should buy it: This rider provides extra coverage along with the health insurance plan. People having work or personal interests that involved traveling can definitely consider this rider to get some additional financial coverage in the form of a lump-sum amount that can be used for their medical or non-medical purpose.

Critical Illness Rider: While a comprehensive health insurance plan helps in getting coverage for critical illness treatments but there are some sub-limits applied in the basic plan. Wherein, the critical illness rider provides additional coverage where the policyholders receive a lump sum amount on being diagnosed with some critical disease.

What should buy it: As critical illnesses can be financially burdening and mentally depressing especially when the patient can’t really get on with their occupation and end up losing income. Thus this rider works like an income replacement as the policyholder can use the money either for the treatment or for personal use. People who are likely to be affected with critical diseases either due to their family history with critical illnesses or due to their lifestyle can opt for this rider.

Conclusion

The riders may definitely come with an added cost but they can save the policyholder from big expenses that can become your pocket expenses. So choose riders mindfully to make your health insurance plan comprehensive to save you at the time of medical crises.

(The writer is the Founder & CEO of PolicyX.com)