What are riders in health insurance? Types, benefits, and how they work | Mint

With health insurance premiums seeing a sharp increase due to the rising cost of medical inflation, you should consider purchasing riders, which are offered as an ‘add-on option’ in your policy. Health insurance riders can provide you with decent coverage at lower costs.

A health insurance rider, which is the extra benefit or coverage that you get by paying an additional amount for your policy, provides your family with enhanced coverage. Leading health insurers now even offer ‘Day 1 PED (Pre-existing Diseases) Rider’ that offer you coverage for any pre-existing ailments right from the start of the policy. Here is a primer on health insurance riders, its types, advantages and disadvantages.

What are the types of health insurance riders?

There are several riders that you can buy alongside your health insurance policy. You have to opt for riders when you are purchasing the insurance for the first time. Here are some of the important health insurance riders and the key benefits that they offer.

Critical illness rider

A policy with a critical illness rider provides the insured with a one-time lumpsum payment if the person is diagnosed with one of the specified critical illnesses. Insurers cover a host of critical illnesses related to the key organs in the body. This rider typically comes with a waiting period of 90 days from the date of issuance of the policy and is usually one-time in nature. It ceases to exist once the payment is made for treatment of critical illness.

Day 1 PED coverage rider

This health plan rider is one of the most important ‘add-ons’ that you should buy alongside your regular policy. It waives any waiting period for PEDs right from the day of the start of the policy. This rider waives any waiting period for PEDs like asthma, hypertension, hyperlipidemia and diabetes.

Maternity rider

This rider is a must when the insured person is married and is planning to start a family. A maternity rider covers expenses related to pregnancy and childbirth. The rider covers expenses related to delivery, pre- and post-natal care and newborn baby care. Depending on the health insurer’s policies, the waiting period for this rider can vary from nine months to six years.

Unlimited automatic restoration of sum insured

This is probably the most important rider that you should add to your policy. The rider restores sum insured unlimited number of times if your base policy gets exhausted on account of raising either a single or multiple numbers of claims in a policy year.

Several insurers offer this rider without any waiting period. But the question of whether the sum insured will get restored for medical treatment related to the same illness or for different illnesses depends on the terms and conditions of the specific policy.

Room rent waiver rider

The room rent waiver rider enables policyholders to choose a room with a higher rent. If you opt for this rider, the insurance provider will waive sub-limits on hospital room rent. Unless your room rent limit in the policy is quite low, there is no need to choose this rider. Unlike the riders listed above, which are all about medical conditions and their treatment costs, room rents are non-medical in nature and can be taken care of under the existing policy.

OPD rider

An outpatient department (OPD) health plan rider works well when you have to frequently visit the doctor for ailments that do not require hospitalisation. ‘OPD Rider’ covers expenses incurred for a medical procedure or examination in the OPD. This includes the doctor’s consultation fee, price of medicine and the cost of diagnostic tests.

Global cover rider

This rider allows you to get reimbursement for planned treatment done overseas. Since medical treatment is costly abroad, this rider provides better treatment options while protecting you financially at the same time. But you can get reimbursement only if you are referred and recommended for treatment abroad by your physician in India.

Other riders

There are several other riders such as ‘Hospital Cash Rider’ that provides cash during the treatment time at a hospital and ‘Reduction in PED Waiting Period Rider’ which reduces the waiting period for pre-existing diseases. You can choose them if they match your specific requirements.

How about the costs of health insurance riders?

The additional amount you pay for riders is tied to your base premium. They are typically much lower than what you will have to spend to enjoy certain benefits if you buy an additional policy. The Insurance Regulatory Development Authority of India (IRDAI) does not allow insurers to charge more than 30% of the base premium for riders. So, if your premium is ₹15000, the rider cannot exceed ₹ ₹4500.

What are the advantages of riders?

Health insurance riders offer several advantages. Here are the key benefits

Higher and customised coverage

With a health insurance rider, you can get better coverage by adding specific benefits to your base health insurance policy. This enables you to customise coverage to your desired levels. In fact, you can turn a basic health insurance policy into a comprehensive one that can be customised to suit your requirements.

No need to buy additional policy

In health insurance, ‘no one size really fits all’. But with health insurance riders you can get most of the benefits that you seek in one policy. There is no need to buy additional policies only to enjoy certain benefits.

What are the disadvantages?

The main disadvantage is that you will have to buy multiple riders to suit your requirements. Each additional rider increases your cost. If you buy 3-4 riders, you will end up paying more than the base insurance premium just for the riders. It is always better to get a comprehensive health insurance policy. You can purchase riders if you are not able to get comprehensive insurance or if the premium charged for such coverage is quite high.

Allirajan M is a journalist with over two decades of experience. He has worked with several leading media organisations in the country and has been writing on mutual funds for nearly 16 years.