All of us are familiar with the term ‘health insurance, however, there is a large part of our populace that continues to be devoid of any type of healthcare financing. Availing of health insurance will be one of the best decisions that you will make in your lifetime. It is the optimal hedge against your health risk. The earlier you avail it, the better, since you will be granted the cover without any complications, often without medical tests etc. and the premium would be lower. This works well because the probability of falling sick or acquiring an ailment as your age is higher compared to falling sick whilst you are young.

Health insurance: Group or individual?

Health insurance is an instrument that enables you to fend off health shocks efficiently without creating any type of financial stress. In many companies, this need is taken care of by the employer as mandated by providing group insurance. Group insurance premiums tend to be lower than that of individual insurance premiums to the large pool of diversified risk that they can create. However, such insurance plans are quite standard for all the employees, they may not cater to the individual needs of the employees.

If you are a self-employed or a business person, then you must ascertain the requirement of yourself and your family and avail an adequate cover that protects you and your family against uncertain events. There are numerous policies from which you will have to choose the one that aligns well with your requirement and needs.

What is a health insurance rider?

Often, the basic policy with standardised coverage may not align well with your requirements. Your needs could vary based on multiple factors, it could be as simple as coverage amount, time period of coverage, benefits offered etc., There are some riders who are optional add-ons available to the basic policy that one may consider adding to the base policy.

It almost gives a customised policy, albeit the fact that these add-ons are mere optional standardised units that can be attached to the basic policy. These add-ons offer coverage for certain specific types of risk, the sum assured designated for the specific rider is required to be paid out by the insurer on the occurrence of the event.

These add-on riders are offered at a very low cost since they cover the only specific risk. IRDAI has also set a certain limit on the premium payable to riders. The premium towards riders cannot exceed 30% of the basic insurance policy.

Most popular types of health insurance riders available in India

Before looking at scenarios when the insurance riders may come in handy, it is important to understand the type of riders:

1. Critical illness rider:
   There are many health insurance plans which offer this as part of their basic plan, there are others that do not cover critical illnesses. If your basic plan does not offer this as part of their basic plan, then it makes sense to avail this rider as it can help build comprehensive coverage. This rider will provide a lump sum payout to the insured irrespective of the actual expenses incurred for the medical treatment pertaining to the ailment.

   The list of critical illnesses that this rider covers include heart attack, cancer, organ transplant, kidney failure etc., Many policies offer a very comprehensive coverage towards critical illnesses which could range between 10 – 38 ailments. A basic plan with inbuilt critical illness could have a lot of exclusions, if one is particular to cover critical illnesses comprehensively, they can choose to avail this rider in addition to the basic plan.

   Case study:
   Rahul Ahuja, aged 43, is single and wants to avail of a health insurance policy, the basic plan does not seem to align with his requirement. Upon examining his family history, it became evident that there were multiple instances of critical illnesses running in his family. He intended to ensure that he was adequately covered to fend for such a situation in the future.

   As he compared many plans in the market, there were some plans which offered critical illness as part of their basic coverage, however, upon examining the exclusions, he found that there were many ailments that were conveniently kept out of the coverage due to the high expenses that the insurer may have to incur upon the occurrence of such disease.

   In this scenario, given the genetic probability of being prone to critical illnesses, it is advised that Rahul Ahuja chooses the critical illness rider which comprehensively covers those illnesses that he has observed in his family and upon consultation with the doctor ascertain his risks in developing such health conditions/ailments.

2. Personal Accident waiver (accidental death / accidental disability):
   Accidents are on the increase in today’s times, irresponsible driving or drunk driving can lead to severe accidents where people lose their lives or become permanently / temporarily disabled. This rider is a low-cost premium add-on, which can help you cover medical expenses that you will incur upon meeting an accident.

   In the event of death due to an accident, the insurance company will provide a death benefit which is an additional amount, here the nominee or beneficiary will get twice the amount mentioned in the policy.

   Case study:
   Anuj Srivastava, aged 25 years, the only son of his parents and presently the only earning member, took up a sales job. He constantly is on the move from one place to another to meet clients and takes the effort to meet his clients as per their convenient schedule, often working at odd hours. During such rides to the client’s office or location, he has come across many accidents some of which have been pretty brutal.

   Although he is extremely careful while he rides his bike, he fears that he may be involved in one such incident and the financial burden of tending to temporary inaction due to an accident could put a huge dent in his dream of building his own house where he and his parents could live peacefully. Sometimes he even fears that in an adverse scenario, where the accident could be severe, he may leave his aged parents with financial woes. The thought has only been killing his inner peace and leaving him with sleepless nights. Upon enquiry with his colleagues, he came to know of the personal accident waiver, which will not only take care of all medical expenses incurred in the event of an accident that could lead to injury, disablement etc.

   In addition, it also provided a certain life cover upon death during an accident, what more could he ask for?! He immediately availed this rider as an add-on to his existing health insurance. This has brought back an immense amount of mental peace to his life.

3. Maternity rider:
   Not all people who avail of a health insurance plan may require to cover maternity expenses. There may be single people who may require health insurance, hence, this aspect remains out of the basic standard health insurance plan. We will subsequently look at a scenario when a maternity rider may be required and the right time to avail the same.
4. Room rent waiver:
   All policies offer coverage towards hospitalisation; however, most policies have an inbuilt limit and only certain types of rooms are allowed as part of the basic coverage. Individuals who are looking for a higher sub-limit or no limit in terms of room rent can opt for this rider. This rider essentially will set the amount for room rent depending on the type of room (general ward, twin-sharing, private rooms etc.,). This will allow the insured to avail themselves of their choice of hospital room without the need to pay any additional admission fee.

   Case Study:
   Ms Anjali was handing out her wedding card to her colleagues, while they goaded on her about the next milestone of having children. Anjali was not only irritated and sharply re-iterated that there were no such plans for the next 3 years! One of her colleagues immediately responded that it is time she evaluated a maternity rider upon her existing health insurance. She noted that the waiting period for maternity coverage in some policies could be as high as 36 months, hence it is ideal to get on the bandwagon as early as possible. When Anjali did her research, it indeed turned out to be true, that even before planning for a family, it is important to plan for the finances. She made a mental note of taking this up with her would-be spouse immediately post-marriage and availing either a standalone maternity cover or availing one as an add-on.

5. Hospital cash:
   This is a lesser-known rider, but a very useful one, it provides coverage in the form of daily cash disbursement to the insured who is required to take care of ad-hoc hospital expenses. This rider will be paid only once during the complete tenure of the insurance plan. There is a limit on the number of days for which this claim can be availed.

   Case study:
   Mr Surrender, aged 55 years, had opted for voluntary retirement, as aged caught up, his illnesses too were severe. For the past 2 years, he had been hospitalised on a few occasions, he was finding it tough to manage the daily cash expenses while he was at the hospital. There were multiple tests and lists of medicines which had to be bought on an ad-hoc basis. He did not have a very thorough support system that could withdraw cash frequently as required.

   Much of the retirement funds were also in investments, which he did not dip into unless necessary. He had a basic health insurance cover that adequately covered his larger medical expenses, his financial adviser upon hearing his need for daily cash during hospitalisation suggested the hospital cash rider. He immediately availed the same at a relatively low cost and continues to stay focussed on maintaining good health. He no longer worries about the daily expenses that he will incur upon hospitalisation, as the rider will now take care of this challenge.

Why are health insurance riders necessary?

There are multiple benefits from availing insurance riders, the prominent ones are:

1. Enhanced and comprehensive coverage over and above the base plan.
2. Reducing the financial woes of your family:
   Any adverse health situation creates a lot of stress on the family. In the event of the loss of the member, the financial woes only deepen. Hence, you must evaluate the requirement under all adverse scenarios and ensure that you have coverage against all medical conditions, thereby ensuring that you do not have to dip into your investments at any point in time.
3. Facilitating milestone achievement of children:
   Many unforeseen medical expenses often create a dent in the achievement of milestones of children. It is the last thing you want to dip into. This can be avoided if you have a comprehensive health plan which offers coverage against all odds, this can be achieved by careful evaluation of riders and adding all those riders who seem to be meaningful to your situation.
4. Payment of funeral and related expenses:
   The death of a person not only brings grief but also brings in a lot of financial stress upon the survivors. The funeral of a person among many communities can be an expensive affair, albeit a very grim situation, there is always an effort to make a grand send-off to the person who meant so much to many people. Having a rider such as accidental death benefit will provide a lump sum payment which can be used to cater to this need.
5. Premium waiver:
   Premium waiver rider is applicable when the insured is no longer able to pay the premium for some reason such as eventuality. The premiums for the plan will be paid by the insurance company to keep the policy active and cover the rest of the individuals under the plan (namely the family members).
6. Tax saving perks:
   Health insurance plan premium qualifies for deduction under section 80D. This includes premiums for riders, the maximum limit is Rs. 25,000, if one were to avail for parents who are senior citizens then the limit would be Rs. 50,000. This is one of the initiatives by the Government to encourage people to avail themselves of health insurance.
7. Enhanced mental peace:
   One of the primary reasons for availing of insurance is to achieve mental peace and reduce financial stress. By availing of health insurance, you feel confident that you will be able to avail the best medical treatment for yourself and your family since the policy will be able to foot the hospitalisation and medical expenses bill. By availing riders, you address specific concerns that are unique to your situations, thereby enhancing mental peace and substantially reducing financial stress.

Conclusion

There are many more riders such as convalescence costs which provides lumpsum amount as payout for extended periods of hospitalisation (more than 10 days), cancer care which specifically covers the medical costs associated with cancer treatment, diabetes care, this targets the ongoing expenses that one has to incur whilst treating diabetes over the long run. The riders are continuously evolving to cater to the changing dynamics of the ecosystem and the requirements of individuals.

Investment in riders has to be a result of careful evaluation of your situation and should align with your medical requirements. The premiums should also be well within your budget, there is no point in availing all the riders in an attempt to insulate oneself, especially so if the rider does not match your lifestyle situation. For example, if you work from home and hardly ever commute and even if you do, probably use public transport, then a personal accident cover may not make sense. Even while availing riders you must read through the fine print, understand the terms and conditions, the exclusions and inclusions and make an informed decision