In the insurance market, there are two types of insurances that are a must for all – a basic life insurance and a health insurance. While the former secures the financial future of your loved ones after you, the latter helps you a great deal in paying medical bills, especially in times of hospitalization. That said, a standalone health insurance plan usually does not provide comprehensive coverage and you might need to expand it with add-on covers and riders.
But unlike a life insurance policy, a standalone health insurance policy needs to be renewed every year. Which means the cost keeps on varying and it won’t be wrong if we say that the cost of a health insurance plan increases with your age. So what is the alternative? A health insurance rider, a.k.a., a top-up with your life insurance policy. Let’s understand this in detail in this post.
Difference between standalone health insurance plan and a health rider
Before indulging deep into the topic, let’s give you a layout of the differences between the two, i.e. a separate health insurance plan and a health cover rider:
|Parameters||Health Insurance Plan||Health Cover Rider|
|Cost/Premium||High premium usually ranging from 10k – 15k depending on the coverage||Cheaper, included in the life insurance premium at an affordable additional cost|
|Renewal||Every year – premiums increase with age.||Premium fixed at the inception of the policy is paid throughout the premium payment term|
|Payment of Claims||– Pre-existing illnesses covered after a specified waiting period|
– Payouts can only be used for medical purposes
-Hospital chosen for treatment has to be from the given list in the policy
|– Quicker approvals after complete medical examination leading to transfer of sum assured in the policyholder’s account – upon the diagnosis of listed illness(es)|
– Such payout of this rider can be used for any purpose – not limited to medical expenses
– No restrictions on choice of hospital and treatment
|Payout||Expenses usually paid in case of hospitalization||Expenses paid upon diagnosis and as soon as the claim gets approved|
There are various types of health cover riders available in the market that you can add to your life insurance policy such as a maternity cover rider, room rent waiver, critical illness rider and an accidental permanent disability rider. Out of these, the last two riders, i.e. a critical illness rider and an accidental disability rider are the most importance riders, irrespective of your age or gender.
Critical Illness Rider
A critical illness rider, as the name suggests, is an add-on benefit that you can attach to your life insurance plan for coverage on diagnosis of a critical illness like a liver-related disease, a major organ transplant or even cancer. These illnesses not only deteriorate your health but also impact your finances greatly. On getting this rider, if you are diagnosed with any of the diseases mentioned in your rider, you get the sum-assured right away. No need for those cumbersome reimbursements and what not.
So, what are some of the best critical illness riders in India? Here’s a comprehensive list:
|Insurance Provider||Min. Entry Age/Max. Maturity Age||Policy Term||No. of critical illnesses covered||Salient Features|
|Max Life Insurance – Critical Illness and Disability Rider||18 years and 85 years||5 to 67 years||64||1. Claim Settlement Ratio: 99.51% |
2. Payout on diagnosis of listed critical illness or total permanent disability (TPD)
3. Max Fit Program – up to 10% discount on annualized premium on accumulation of 13 to more than 36 healthy weeks
4. Critical illnesses covered:
Angioplasty, Severe Osteoporosis, Cancer of Specified Severity, Open Chest CABG, Coma of Specified Severity, Major Organ/Bone Marrow Transplant, Blindness, Deafness, Third Degree Burns, Alzheimer’s Disease, Parkinson’s Disease, Amputation of feet due to complications from Diabetes, HIV due to blood transfusion and occupationally acquired HIV, Necrotising Fasciitis, Tuberculosis Meningitis, Terminal Illness and 48 more illness covered.
|Kotak Life||18 years and 85 years||–||37||1. Claim Settlement Ratio: 98.82% 2. Illnesses include cancer, open chest CABG, loss of limbs, deafness and loss of speech etc.|
|LIC Critical Illness Benefit Rider||18 years and 80 years||5 years to (Policy Term – 1) Years||15||1. Claim Settlement Ratio: 98.74% 2. Coverage ranging from Rs 1 lakh to Rs 25 lakhs|
|PNB Metlife Critical Illness Rider||18 years and 75 years||10 – 40 years||–||1. Claim Settlement Ratio: 97.33% 2. 15 days of free-look period 3. First heart attack and malignant cancer covered under serious critical illness 4. 15 days of grace period allowed for premium payment|
What we conclude from this table is that the coverage against the maximum number of critical illnesses is provided by Max Life Insurance in their Critical Illness and Disability Rider. Where most companies offer separate riders for critical illness and disability, this one rider includes coverage for both situations. Also, the company has the highest claims paid ratio of 99.51%.
Other options include the famous LIC rider which, however, offers a very limited sum assured ranging from Rs 1 lakh to Rs 25 lakhs.
Under this rider, if the policyholder meets with an unfortunate accident and suffers a permanent disability, they get pre-approved sum-assured to manage their altered lifestyle. This helps a great deal, especially when the disability leaves one with limited mobility affecting their livelihood choices.
Some of the most popular disability riders that you can attach to your life insurance plan are:
- Max Life Critical Illness and Disability Rider (Combined coverage; Sum Assured: Rs 1 lakh – Rs 1 Crore) – this is a very affordable rider and Max Life covers disabilities arising from accident as well as from sickness in this critical illness and disability rider
- SBI Life Accidental Total & Permanent Disability Rider (Sum Assured: Rs 25,000 – Rs 50 lakhs)
- Kotak Permanent Disability Benefit Rider HDFC Life Accidental Disability Rider (Sum Assured: Rs 1 lakh – as per policyholder’s eligibility)
In conclusion, we do not claim that a life insurance policy with a critical illness rider and a disability rider is all the coverage you need. What we suggest is, if your budget allows, take a basic health insurance plan and add these riders to your life insurance plan.
This will massively bring down the cost and give both you and your family better and wholesome coverage against health and financial emergencies, both. And if your pocket feels too burdened with two policies, the least you should do is pair your life insurance plan with a critical illness rider.
Standalone Health Plan vs. Riders in Term Plan: FAQs
A standalone health insurance policy is a policy where the insurance company covers the cost of an insured individual’s medical and surgical expenses. There is no life coverage component involved in a standalone health insurance plan.
To amplify the benefits of a basic term plan, insurance companies offer a rider known as the critical illness rider which covers the cost of medical and surgical expenses, should you get diagnosed with any of the listed critical illnesses. Max Life provides coverage against 64 critical illnesses with its critical illness rider, which is the highest in India – as of now.
Critical illness is a medical condition which is extremely serious and acute in nature but there is scope for betterment with the right medical treatments. Whereas, in the case of terminal illness, there is no further treatment present in the medical science and the situation cannot be further improved.
Companies like Max Life Insurance provide complementary terminal illness cover with their term plans. Therefore, if you have a family history of a terminal illness, it is advisable to take your term insurance from such companies only.