9 Benefits of Adding Riders to Your Health Insurance Policy

Most of us are aware of the importance of buying health insurance for ourselves and our loved ones. However, as time passes, our healthcare needs also change. In such cases, a basic health insurance plan may no longer be sufficient to cover all medical expenses. But does this mean that you have to replace your existing health insurance policy entirely with a new one that can cover these additional costs? Absolutely not! Instead, you can expand the coverage of your basic policy by adding riders or add-ons to it. This article elucidates what are riders in health insurance and the 9 benefits of adding them to your health insurance policy.

What Are Health Insurance Riders?

Riders or add-ons are extra benefits or coverage that are not included in the standard features of a health insurance policy but can be added separately for an additional premium. By adding riders, you can increase the benefits or sum insured for specific events beyond what your current health insurance policy provides.

The Insurance Regulatory and Development Authority of India (IRDAI) states that the total premium for all riders or add-ons added to a single health insurance policy cannot exceed 30% of the original premium amount.

What Are the Benefits of the Health Insurance Riders?

1. Increase the Policy Coverage:

By adding riders to your policy, you can increase the scope of coverage provided by your basic health insurance plan. For example, you can add a critical illness rider to your policy to receive a lump sum payout if you are diagnosed with a critical illness such as cancer, stroke, or heart attack. Similarly, a premium waiver benefit rider can waive future premium payments if you become disabled or die, while the benefits under the policy continue to be available. Adding riders can help you tailor their coverage to your specific needs and provide additional financial protection in case of unexpected events.

Join Now: PersonalFN is now on Telegram. Join FREE Today to get 'Daily Wealth Letter' and Exclusive Updates on Mutual Funds

2. Clear Debts:

A critical illness rider in health insurance provides a lump-sum payout if you are diagnosed with a critical illness such as cancer, heart attack, or stroke, among others. This payout can be used to cover the medical expenses and treatment costs associated with the illness. Additionally, if you are unable to work due to illness, the payout can also be used to cover daily living expenses, such as rent or mortgage payments, and other debts. Therefore, a critical illness rider can help in clearing debts by providing a financial cushion to the policyholder during a difficult time.

3. Customise the Policy:

The riders help tailor health insurance plans to suit individual requirements. By using the online premium calculator, you can customise your health insurance plan by adding or removing the riders and add-ons. However, while selecting the riders, it is essential to assess your medical history, pre-existing conditions, financial constraints, and other relevant factors.

4. Maternity Coverage:

Health insurance riders specifically designed for maternity coverage can provide additional benefits beyond what is covered in a standard health insurance policy. These riders can cover all expenses related to childbirth, including prenatal and postnatal care, delivery charges, hospitalisation, and even the cost of vaccinations for the newborn in the first year. By adding a maternity insurance rider to your health insurance policy, you can ensure that you have comprehensive coverage for all the costs associated with bringing a new life into the world, without having to worry about any unexpected financial burden.

5. Coverage for Accidental Death/Disability And Waiver of Premiums:

Health insurance riders such as Accidental Death Benefit Rider and Premium Waiver Benefit Rider provide additional coverage in the event of accidents resulting in death or disability. The Accidental Death Benefit Rider pays out a sum assured if the policyholder dies as a result of an accident, in addition to the basic sum assured. The Premium Waiver Benefit Rider ensures that all future premium payments for the policy are waived if the policyholder becomes disabled or injured for a certain period or dies while the life assured under the policy is alive. This rider also extends to permanent and partial disability. By adding these riders to their health insurance policies, policyholders can provide their loved ones with additional financial protection in the event of an accident resulting in death or disability.

6. Save Taxes:

As per Section 80D of the Income Tax Act, you can avail of tax benefits of up to Rs 25,000 p.a. on the premium paid towards health insurance. If you pay an extra premium for the riders, the tax benefits will apply to the entire amount of the additional premium paid, making you save more on your taxes.

7. Fixed Daily Income:

If you opt for a daily hospital cash rider and get hospitalised for a certain number of days due to an illness or injury, you will benefit from an additional amount of money as a fixed daily income. It ensures that you have a source of income to cover non-medical expenses like food, transportation, accommodation, etc. while you focus on your recovery. This rider is useful for those who do not have a contingency fund to cover such expenses.

8. OPD Benefit:

The OPD (Outpatient Department) benefit rider in health insurance helps you cover the medical expenses incurred during outpatient treatment, which are not typically covered under a standard health insurance plan. This rider offers a fixed amount of coverage towards expenses such as consultation fees, diagnostic tests, pharmacy bills, and other medical costs incurred during outpatient treatment. You can use this rider to cover the expenses of regular health check-ups, dental treatments, minor illnesses, etc., which can quickly add up. An OPD benefit rider ensures that you have adequate coverage for all your medical expenses.

9. Increase the Room Rent Limit:

To enhance the hospital room rent limit of a standard health insurance policy, you can opt for a room rent waiver add-on. This add-on can increase the capped limit or remove it entirely, allowing for coverage up to the sum insured. This rider is especially beneficial for those seeking treatment in metropolitan areas where room rents are significantly higher. For example, if the standard policy caps the room rent at Rs. 2500 per night, the add-on can increase the sub-limit to Rs. 5000 per night, providing comprehensive coverage for room rent expenses.

To conclude:

Adding riders to your health insurance policy may increase your premium, but the benefits they provide make the extra payment worthwhile. From maternity coverage to critical illness benefits, riders offer additional protection and financial security to policyholders. Moreover, with tax-saving benefits available on the premium paid towards riders, they become an even more attractive option. So, take the time to explore the different riders available and choose the ones that best suit your needs. Inform your insurance provider and add the riders to your policy today for enhanced coverage and peace of mind.

KETKI JADHAV is a Content Writer at PersonalFN since August 2021. She is an MBA (Finance) and has over seven years of experience in Retail Banking. Ketki specialises in covering articles around banking, insurance, personal finance, and mutual funds and has been doing it for over three years now.

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.