No claim bonus to critical illness: Key term life and health insurance riders you should know

The waiver of the premium rider keeps the term insurance plan active even if the policyholder is not able to the premium due to some unavoidable circumstances. The rider mostly comes into action when the policyholder losses on the monthly income due to a certain unexpected event like partial or complete disability due to an accident. The rider can also be availed during a critical illness when the policyholder losses on the monthly income and fails to pay the premium amount.

It is a rider that helps to cover the cost of critical illnesses like cancer, heart attack, kidney failure, coronary artery bypass, and paralysis during both, hospitalisation and non-hospitalisation expenses. On diagnosis of the illness, the rider provides the policyholder with a lump sum benefit. If unfortunately, the policyholder dies during the critical illness, the term insurance plan benefit is paid to the nominees.

With the help of an income benefit rider in a term insurance plan, the family receives a regular income for a fixed number of years in case of the death of the sole breadwinner of the family. The income benefit rider is an addition to the existing life insurance policy as it provides the beneficiaries with an amount equal to the policyholder’s monthly income. The dependents get additional income for approximately 5-10 years along with the total sum assured.

This rider allows policyholders to choose a room with a higher sub-limit or even one with no sub-limit at all. In general, most policies set a maximum cap on room rent based on the type of room covered by the policy. In the insurance policy, they may only provide financial coverage for standard or semi-private rooms. The room rent waiver allows policyholders to select a room of choice, including private and deluxe rooms, without paying any additional fees at the time of admission.

The hospital cash benefit rider pays the policyholder daily cash during hospitalization to cover any related hospital expenses. The daily cash could range between a few hundred and a few thousand rupees. Non-medical expenses can also be met with the funds. This rider can assist the policyholder in meeting any additional expenses not covered by the policy.

Most insurance policies do not cover pregnancy-related hospitalisation expenses. However, by adding a maternity cover rider to the policy, the insurance holder can get comprehensive coverage for expenses incurred during childbirth. The maternity cover rider, on the other hand, has a 2-3 year waiting period.

Some insurers also provide coverage for the child after birth until the policy expires.

A critical illness plan, as the name implies, pays a lump sum amount if the insurer is diagnosed with a serious illness such as cancer or stroke. The lump sum payment can be used to cover not only medical expenses, but also debt, lost income, or any other need of the insured or the insured's family. Most serious illnesses, including heart attack, cancer, stroke, kidney failure, and paralysis, are covered by critical illness insurance.

A personal accident rider, like a critical illness rider, pays a lump sum amount to the insured or the nominee if the former is involved in an accident that results in permanent total or partial disability, temporary disability, or accident death. This rider can be added to the policy for a small additional fee. The payout can be used for medical expenses, unplanned expenses, income replacement, or even funeral expenses.

While most health insurance policies cover medical expenses incurred during hospitalisation, the cost of outpatient treatment (OPD) is usually borne by the patient. By selecting OPD coverage, an insurer can ensure that his/her policy also covers medical expenses incurred for non-hospitalisation treatment.

In general, health insurance policies do not cover expenses incurred on consumables during a hospitalisation. Consumables are medical aid items that must be discarded after use, such as gloves, masks, PPE kits, housekeeping items, surgical items, and so on. All of these charges are usually billed directly to the patient, and they can quickly add up. However, if the insurer chooses a consumables cover benefit, he/she won't have to worry about these costs.

A no-claim bonus (NCB) is a monetary reward for not filing a claim in a given year. It usually takes the form of additional coverage above and beyond the sum insured under the primary policy.

Medical inflation in India is rising rapidly, much faster than overall inflation. With the cost of treatment increasing year after year, it is only natural that policyholders would want a larger coverage after a few years.

An inflation protection rider can help in this situation. This rider in health insurance policy raises the sum insured by a predetermined percentage at predetermined intervals to keep up with inflation.