Health Insurance: Opt for suitable riders, add-on covers to maximise your benefit

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Updated: July 14, 2015 12:39 AM

Add-on plans play a critical role in giving you a better coverage at an affordable premium. It is better than buying a new health policy altogether. If you have a new requirement wherein the estimated cost is known, then buying a rider is the safest bet

If you are looking for — or already have purchased — a health insurance plan, chances are you have come across terms like riders and add-on covers. Both refer to additional benefits that can be packaged along with the base plan. So, how are these two terms different from each other?

What is a rider

Simply put, riders are additional benefits that can be added to the base health insurance plan. They allow you to expand your insurance coverage as per requirement, at a lower cost. Cost of additional riders is paid over and above the base premium. The insurance regulator has capped premium on riders at 30% of the base policy.

Let’s look at some of the most common health insurance riders:

Maternity cover: As the name suggests, this rider provides coverage against maternity expenses incurred during child birth procedures, after a waiting period. This could be two years or more, depending on the insurer and the plan. In addition to this, insurers also provide an option to cover new-born babies, from birth till the end of policy tenure. Opting for this rider would make your premium amount go up by 15-20%.

Room rent waiver: This rider allows you to opt for a room with a higher sub-limit or without sub-limits. Usually, most insurance companies put a cap on the room rent. If you take a waiver for this, you can choose to stay in a better room without causing a dent in your pocket. Room rent waiver comes handy if you are either living or undergoing treatment in a metro city where hospital room rents are high.

Hospital cash: Hospital cash rider provides for the daily cash that you may require for taking care of medical expenses during the stay in hospital. Typically, you can claim benefits anywhere between R500 and v3,000, depending on the nature of your stay. You can claim a higher payout if you are admitted to ICU. You will be eligible for the payout only if you are hospitalised for a minimum of 24 hours.

What is an add-on cover

Add-on cover protects you against unknown medical emergencies that may involve higher medical expenditure. Each health plan comes with specific set of riders that can be purchased at the time of policy issuance. You have to pay additional premium for availing the benefits.

However, the amount you pay for this is relatively lower vis-à-vis buying a new policy altogether. Let’s discuss about some of the common add-on covers:

Critical illness cover: Critical illness refers to any disease or illness that is terminal in nature, such as cancer, massive heart stroke, brain tumor or multiple sclerosis. Critical illness cover provides an immediate lump-sum amount, irrespective of expenses incurred during the actual medical procedure. Typically, such plans cover 10-15 ailments on an average. However, this can go up to 38 ailments in case of a comprehensive package.

Personal accident cover: This add-on cover offers compensation for all kinds of outcome of an accident, including accidental death, permanent total disablement (loss of two limbs, sight, speech and hearing), permanent partial disablement (loss of an arm, leg, one eye or one ear) and temporary total disablement (fractures in both limbs and temporary blindness).

Top-up/super top-up cover: Top-up or super top-up plans are designed to provide additional health insurance cover, over and above your existing health plan. They can be used to upgrade the sum assured of your base plan. It is an alternative to an additional health policy that is often considered an expensive option. A top-up plan reimburses expenses exceeding base cover only for one hospitalisation. A super top-up plan, on the other hand, reimburses expenses for the entire year.

When to buy what

Add-on plans will play a critical role in giving you a better coverage at an affordable premium. It is better than buying a new health policy altogether and comparatively cheaper, too. However, if you have a new requirement wherein the estimated cost is known, then buying a rider is your safest bet.

Again, there are some plans such as for critical illness that can be brought both as a rider or an add-on plan.

You must assess your specific needs, compare all options available in the market and make a decision based on your age and requirement. Always remember, a well-thought-out decision can go a long way in securing your future.

The writer is CEO & co-founder,

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