Riders let you take additional cover against a specific risk at a low price. But they should not be seen as replacements of the base cover.

A basic health insurance policy is a must have today. A cover of `3-5 lakh for individuals, especially senior citizens, or a `5-8 lakh family floater plan (in a family where the eldest member is below 45 years old), is considered sufficient.

But what about incidental expenses? Will a health insurance policy be enough to cover a critical illness or a serious accident? Worse, what if the event impairs your ability to earn?

To tide over such medical emergencies, there is another category of insurance plans that you need to consider. These are known as riders, but they are not replacements for basic insurance policies like a pure term plan or a comprehensive health insurance.

Many of these riders are available as standalone policies, but they are more expensive. For example, the premium for a standalone personal accident policy ranges between `200 and `250 per lakh of sum assured. For a personal accident policy with a sum assured of `3 lakh, you will end up paying `600­750. A personal accident rider (sum assured `3 lakh) will cost you `563 annually.

According to insurers, riders help you take additional insurance against specific health or life risks at a low cost. Charges for the riders are paid (the regulator has capped the premium at 30 per cent of the base policy) over the base premium. You can buy multiple riders on one base plan.

Around 10-15% of policyholders purchase add-on covers or riders. One should always consider factors like health needs, features in-built in the existing health plan and so on, before deciding on a rider. Maternity cover is useful for someone planning a family. If maternity is available in the base cover, there is no need to purchase it separately. But an out-patient cover is for everybody.

However, incidence of people buying riders is not very high due to low awareness. Riders have not become a popular route to enhance protection also because the quantum of additional protection itself has been capped by regulations

Let's take a look some of the important riders that you could choose to buy.

Riders that are worth considering

Critical illness

This rider can be attached to your life or health insurance policy to substitute loss of income in the event of critical illness. It provides a one-time lump sum benefit. Typically, 5 to 15 critical illnesses, sometimes even 20, are covered. Some experts opine that buying a standalone critical illness policy is better as it covers a wider range of ailments. Moreover, a rider won't continue beyond the tenure of the base plan. Most critical illness covers come with a survival clause of 30 days. This means the policyholder needs to survive for 30 days after diagnosis to make a claim. The insurer will pay the money after the survival period. Also, keep in mind that critical illness plans don't include pre-existing ailments.

Accident

This rider covers death, permanent disability, permanent partial disability and temporary total disability due to an accident. Choose a policy that covers all four casualties. It will pay 100 per cent of the sum assured in case of death or permanent disability. For permanent partial disability, it would pay a portion of the sum assured and for temporary disability, it pays a weekly compensation.

Hospital cash

This policy offers daily cash to pay medical and non-medical expenditure during your stay in hospital. Most hospital cash policies need you to be hospitalised for at least 24 hours to be eligible for the payout. Some companies offer it for up to seven days of hospitalisation while others up to 10 days. A hospital cash policy pays in the range of `500-3,000. For stay in ICU, the limit increases but the number of days eligible for cash reduces.

Room rent waiver

A room rent waiver rider allows you a higher sub-limit or rooms without sub-limits in case of hospitalisation. Most insurance policies have a defined sub-limit on the room rent and room type (single or double). However, if you've have a room rent waiver rider, you can opt for either a better or more expensive room without it eating into your sum insured.

Surgical benefit

Many life and general insurance companies offer surgical benefit riders. These plans cover around almost 600 different surgeries with a sum assured ranging from `1 lakh to `10 lakh. However, check the fine print before you buy because in some plans the benefit amount is capped, according to the grade of the surgery and the plan opted. Such riders also provide a pre-fixed sum of money in case of surgery. Given the nature of the coverage, this rider (and the critical illness plan) are especially useful for people above the age of 30-35. However, experts say these work well as supplementary covers and should not be seen as a replacement of the basic mediclaim cover.

Waiver of premium

This is designed for those who have small children. When taken with an endowment plan or any child plan, this rider ensures your maturity benefit is protected even if the policyholder cannot pay all the premiums, due to untimely demise or total and permanent disability. In case of child plans, a waiver of premium rider is beneficial to ensure that the child receives the benefit even in the case of an unfortunate demise or disability of the parent. Another option could be the `family income benefit rider'. It provides death benefits and a monthly income (one per cent of the sum assured per month) to the beneficiary if the insured dies before policy lapses.