Article

Health Insurance Riders
September 14 , 2012

Health insurance mainly offers three types of covers- mediclaim, critical illness benefit and hospitalization benefit. Mediclaim reimburses medical expenses up to the limit of sum assured. Critical illness policy pays a benefit equivalent to sum assured on diagnosis if one of the diseases covered for. Hospitalization benefit pays lump sum benefit when the insured is hospitalized for surgery. Riders are attachments to the original policy that widen the scope of the policy coverage or offer other benefits. They come at an additional charge.

Most popular riders in health insurance are critical illness benefit, accidental death and disablement cover. These are discussed below. Since life insurance companies do not sell health policies or mediclaim as they are better known as, they sell critical illness policies and surgical care (or hospitalization) policies as standalone ones. These are offered as riders by the health insurance companies that actually sell mediclaim policies.

Types of health insurance riders

Critical illness cover is often attached to health policies. If the policy holder is diagnosed with any of the 8-9 diseases covered, a lump sum benefit is paid. This is suitable for earning persons with dependants.

Accidental death rider pays a lump sum amount to the beneficiary in the event of death by accident. This cover is a superfluous one to have as long as one has a good life insurance policy.

Disablement cover pays benefit in the event of disablement or dismemberment due to accident. Benefit paid depends on the extent and nature of disablement caused. For permanent and total disablement 100% of benefit is paid. In case of permanent and partial disablement 50% of sum assured may be paid. This rider is useful for earning persons whose occupation or mode of travelling makes them prone to accidents.

Good for you?

Riders are meant to enhance insurance coverage. However if the same product can be bought as a standalone policy, chances are you get better coverage in terms of more inclusions and fewer exclusions. So if you are convinced a rider policy is essential for you, find out if it is available as standalone product. If the difference in premium is only a few hundreds, go for it.

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