Do You Need Riders or Add-on Covers To Maximize Benefits?

Are you on a hunt for health insurance? Or have you already purchased health insurance? Chances are you are familiar with terms like Riders and Add-on covers. Both these terms play a critical role when it comes to better coverage at a reduced premium rate. They give you a better option to buy a new insurance product altogether.

Both riders and add-on cover come with extra benefits that can be packaged along with the base health insurance plan. Purchasing them is the safest bet, especially if you have met new medical requirements wherein the estimated cost of the hospitalisation or treatment is known to you.

Let’s discuss what make riders and add-on cover stand differently.

What Is a Rider?

In a simple term, a rider is a type of insurance policy, which is designed to add additional benefits to the base health insurance or amend the terms of the basic health insurance policy. Serving as an insurance endorsement, it provides insured persons with options like additional coverage. Or, it may even limit or restrict coverage.

With the help of this provision, the insured party can expand its insurance coverage as per requirement, at a reduced cost. If you decide to buy a rider, you need to pay an additional cost over and above the base premium. The costs of the rider are usually low because they involve little underwriting.

How a Rider Helps

Say you have purchased a health insurance policy. And later on, you feel some specific medical needs that are not covered by your existing insurance policy. Buying a new policy just to meet those specific needs can cost you high. But a rider can enable you to meet those needs.

Many health insurance companies in India are offering supplemental insurance riders these days with a view to tailoring insurance plans by adding varying types of additional coverage. The key benefits of insurance riders include an option to choose different coverage at a later date and increased savings as you won’t need to purchase a separate policy.

Common Forms of Insurance Riders

Riders come in several forms, including room rent waiver, maternity cover, hospital cash and so on.

• Room rent waiver: Room rent waiver is a kind of rider which lets you choose a room with a higher sub-limit or without sub-limit. In general, while searching for a suitable health policy, you may come across plans with a cap on the room rent. Taking a waiver for this can remove the cap and you can stay in a better room without burning a hole in your pocket. Room rent waiver is a suitable option for those living in a metro city where hospital room rents are very expensive.
• Maternity cover: This rider covers maternity expenses incurred during childbirth procedures. However, a waiting period of two or more years is applied to cover these expenses, depending on the insurance company and the policy. Apart from this, insurance providers cover newborn babies, from birth until the end of the policy tenure.
• Hospital cash: This is another term that allows daily cash benefits. You may require daily cash to deal with medical expenses during hospitalisation. Typically, the daily cash can range between Rs. 500 and Rs. 3,000. However, the amount depends on the policy, the insurance provider and the nature of your stay. A higher payout is made in case you are admitted to the ICU. You will be eligible for these benefits only in the case of 24 hours of hospitalisation.

What is an Add-on Cover?

Add-ons are additional features that can provide you with wholesome security against unknown medical emergencies that may involve higher medical costs. You can buy an add-on cover an optional cover or a top-up to your base health insurance plan. Each health insurance policy comes with specific add-on covers that can be bought at the time of policy issuance.

To avail of this benefit, you need to pay an additional premium. However, the premium paid against the add-on cover is comparatively lower than the cost of a new policy to cover known medical emergencies. Below are some of the common add-on covers available in India.

Common Forms of Add-On Covers

• Critical illness: This is a type of add-on cover that provides coverage for critical ailments, including cancer, stroke, brain tumor, liver failure, kidney failure, etc. This cover provides an immediate lump sum amount up to the sum insured.
• Personal accident cover: Personal accident cover is a type of add-on cover, which provides compensation for all kinds of outcome of an accident, such as permanent total disablement, loss of two sight, limbs, speech and hearing, accidental death, permanent partial disablement (loss of a leg, arm, one eye or one ear) and temporary total disablement (temporary blindness and fractures in both limbs).
• Top-up/super top-up cover: These products let policyholders enjoy additional insurance benefits over and above their primary health insurance policy. These products upgrade the sum assured of the base plan. They are an affordable and perfect alternative to an additional health cover that is often very expensive. A top-up cover can reimburse medical expenses beyond the base cover for one hospitalisation. On the other hand, a super top-up product can reimburse expenses for the entire year.

Bottom Line

Riders and Add-on Cover, both play a critical role. Buying a rider is your safest bet if you have a new requirement wherein the estimated cost is known. In contrast, add-on plans are a better option when it comes to choosing better coverage at an affordable premium. Riders and Add-on covers are comparatively better and cheaper than buying a new health policy altogether. There are some plans for critical illnesses. These policies can be bought both as an add-on plan or a rider. However, before choosing any plan, assess your specific needs. 

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