Difference Between Riders And Add-On Covers In Health Insurance Plans

As Steve Jobs once said, "The only way to be truly satisfied is to do what you believe is great work." This means creating something that comes out just right, fitting your needs like a glove. When it comes to health insurance, your policy should be no different: tailored to fit your needs, no two policies alike. But as you get into the details, words such as "riders" and "add-on covers" begin cropping up as if they're some kind of secret code in an elaborate game. What do they all mean? Is this all necessary, or is it optional extras that insurers push on you to bump up your premium?

Health insurance is a pretty complicated financial instrument to deal with, and terms like riders and add-on covers are very often used interchangeably to denote various features one may buy along with their regular health cover. In essence, riders and add-on covers have conventionally been considered two separate attachments, tailor-fit to a health insurance policy, serving quite different purposes. However, on closer investigation, it becomes clear that all these terms refer to one thing: added features to a regular health insurance policy extended to include more benefits and coverage for the members.

Riders and add-on covers are those additional features apart from the basic policy that enables the policyholder to get their insurance plans tailored to suit their personal needs and requirements. The idea of flexibility is quite important for ensuring that health insurance coverage fits your personal health needs and financial circumstances. From protection against certain health risks to comprehensive benefits beyond the ordinary, riders and add-on covers provide you with substantial options to enhance your policy.

Understanding how riders and add-on covers work will facilitate making informed decisions about health insurance. Although these may be referred to with different names depending on the location or with different insurance companies, the basic idea is the same: add a few extra layers of protection to the main health insurance coverage.

Let’s have a more in-depth insight into how riders and add-ons add benefits to your insurance policy!
 

Understanding Health Insurance Riders/Add-Ons

Health insurance riders/add-ons are, in simple terms, extra benefits or coverage other than those provided as basics in a standard health insurance policy. These additional features are actually designed to provide added protection and increased coverage against specific needs or risks not covered by the base policy itself.

In simple words, a health insurance rider/add-on is an additional feature that can be added to an existing policy at an extra cost. It extends the benefits or sum insured in case of some predefined events. These added features are not part of a standard policy, and availability is only granted through payment of an additional premium.

You get a rider or add-on by paying an additional premium over and above your health insurance policy in force to avail its benefits. The cost of it is directly related to the extra benefits and coverage. Riders and add-ons are designed to complement your health insurance policy and extend benefits in certain situations or conditions not covered by the base policy.

The IRDAI has stipulated that if there is more than one rider or add-on forming part of the same health insurance policy, then the aggregate premium cannot be greater than 30% of the base premium. This way, you are free to upgrade your coverage with such add-ons, but the price increase would remain reasonable and proportionate.

Insurance companies provide a variety of benefits that can be added to your base policy. Let’s dive deeper to understand the different categories you can choose from!
 

Types Of Add-Ons In Health Insurance Policies

Here’s a breakdown of different add-ons available that can be included with your health insurance policy:

• Room Rent Waiver:
  A regular health insurance policy has a cap on room rent expenses. The Room Rent Waiver add-on increases this cap or discards it, thereby opening up higher or unlimited room rent expenses with respect to the sum insured. The benefit would be more pronounced in metropolitan cities because the costs of hospital rooms are really very high there.
  
  Let’s have a look at an example!
  Suppose your regular policy limits the room rent compensation to Rs. 1500 per night. For preferred hospitals, you may find the amount is somewhat insufficient. Hence, a Room Rent Waiver add-on may increase it to Rs. 4000 per night or even remove the cap completely.
   
• Maternity Cover:
  Maternity cover allows financial protection against pregnancy and childbirth expenses. Hence, this add-on coverage often includes prenatal, postnatal, and delivery costs, along with sometimes the newborn child's expenses. Some policies also extend their coverage up to three months after the child's birth or equivalent months as specified in the said policy by the insurer.
   
• Hospital Cash Cover:
  The add-on provides a daily cash allowance for hospital days. This amount is payable for each day spent in the hospital, usually starting from the second day of admission. This cover will help offset incidental expenses arising from transportation, food, and even lost wages due to protracted hospitalisation.
   
• Critical Illness Cover:
  The Critical Illness Cover provides a payout upon the diagnosis of a serious illness listed in the policy, such as cancer or heart disease, regardless of the total expenses one accrues for treatment.
• Personal Accident Cover:
  Personal Accident Cover compensates for accidental injuries and, in case of death, partial or permanent disability; as a result, it covers the insured's family with a payout. This add-on is highly important to keep one safe from the aftermath of accidents.

These add-ons provide valuable additional coverage; however, not all available options need to be opted for. A number of riders or add-ons significantly increase premium costs. It is very important to assess individual health needs, medical history, lifestyle, and family health conditions before choosing which add-ons are right for you.

Please Note: Add-ons may vary from one insurance provider to another. It is advisable that you always seek help from your insurance provider to get a comprehensive understanding of all the add-ons available and how they can be adjusted to suit your needs.
 

Benefits Of Health Insurance Riders

Health insurance riders come with several benefits, adding value to your basic health plan by providing extra coverage on specific needs. Here's how riders can benefit you:

• Improve Your Coverage
  Riders are add-ons that allow you to enhance the protection of your basic health insurance policy to cover specific conditions or treatments that the standard plan may not fully cover. One of the best examples is adding a critical illness rider to one's policy for greater protection against major illnesses such as cancer or heart disease.
   
• Customise To Fit Your Needs
  A rider gives insureds flexibility in customising health insurance to suit their circumstances. Whether they travel in and out of the country to require travel insurance coverage or just enjoy high-adventure sports as hobbies that require special coverage, riders fit insureds to the requirements of their lifestyles.
   
• Available At A Marginal Cost
  Riders are generally available at a pretty low additional premium when weighed against the costs that the treatments they cover may come with. To be precise, while a critical illness rider would cost just a few thousand annually, treatments related to critical illnesses could run into several lakhs. Such cost-effectiveness makes riders a pragmatic way of extending your coverage.
   
• Expand Protection Scope
  A few base health insurance policies may not include specific expenses, say ambulance fees or the inclusion of hospital cash allowance. Riders fill these deficiencies so that you have comprehensive coverage for additional costs not fully included in the basic policy. This, therefore, means broader protection and better preparedness against contingencies that come your way in the form of medical expenses.
   
• Improve Financial Security
  Critical illness, accidents, and other emergencies can make quite a dent in your savings. Riders provide that financial cushion against costs that otherwise drain your savings. Added riders to your policy will give you the added financial security you may need in case health problems show up unexpectedly.
   

Wrapping It Up!

Insurance riders and add-on covers are some of the most valuable tools that facilitate the customisation of a policy. Moreover, understanding the beneficial aspects and the limitations will provide one the ability to make informed decisions by being effectively covered against any wind that might arise in life. These riders and add-on covers, in many ways, give the leeway to make health insurance a truly tailor-made affair-be it increasing the cover, customising your policy, or simply an added layer of financial security.

Health insurance is not a one-size-fits-all product, and riders and add-ons are there to ensure the policy fits like a glove.