Health insurance: Knowing how a rider adds value to your health plan

With rising healthcare expenses, a basic health insurance policy may not be enough to meet the needs of an entire family. As health insurance companies offer riders or add-ons such as room rent waiver, hospital cash, critical illness cover, one can opt for them along with the base health insurance policy. Health insurers also offer top-up policies to meet the actual expenses over and above the limit available in the basic health policy.

Room rent waiver
As many health insurance policies have a cap on room rent, this rider will enable a policyholder to choose a room with higher sub-limit without paying any extra amount. Typically, a 35-year-old policyholder with a Rs 15 lakh sum insured policy will have to pay around Rs 1,500 more to add this rider to the mediclaim policy or opt for a policy that does not have a cap on room charges. In the latter case, the premium will be higher than compared to adding the rider to the base cover.

Hospital cash rider
This rider will pay a fixed amount for the medical expenses to the policyholder for each day of hospitalization. Hospitalization has to be for a minimum period of 48 hours. The fixed cash payment will be one-time for the number of days mentioned in the policy and it will not be related to the actual expenses incurred during the hospital stay.

Critical illness cover
This cover provides the policyholder a lump sum amount irrespective of the expenses incurred during the medical treatment for diseases such as cancer, heart attack, kidney failure, organ transplant, etc.

After payment of the lump sum, the insurer terminates the additional rider but the basic policy will continue. Experts suggest it is always better to opt for a critical illness rider which will help mitigate the financial burden to some extent and the family will not have to dip into the savings built for long-term goals. Also, buying a critical illness plan at a young age can offer the policyholder a high sum assured with lower premiums. The policyholder must understand the inclusions and exclusions in the rider before buying it.

Top up cover
A regular health insurance policy reimburses hospital bills up to the sum insured while a top-up plan covers costs after a certain threshold is reached. A top-up plan is available in two versions—individual cover and family floater, and a policyholder can buy a top-up cover from any insurer. Top-up plans are cheaper than regular health insurance plans as they cover only beyond a threshold and can be claimed together for a single hospitalization. There are super top-ups, which do not have the limit of single claim and can be claimed for any illness over the deductible amount for the entire year.

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