What Is A Low Cost Health Insurance Rider?
By Robert Fredricks Posted in Health Insurance News
When it comes to health insurance, everything can seem simple until the end of the policy, where the policyholder learns sees the riders. Exact riders will vary between policies and companies, but they all share some similarities. Types of riders are referred to with similar language between companies to ease understanding for consumers and agents alike. Also, knowing who the rider is meant to protect will shed light on whether it is saving or costing the consumer money in the long run.
What Is A Rider?
Before discussing different riders, it is important to define what they are in the first place. A “rider” is a bonus to the policy. It differs from limitations and exclusions in that it generally increases coverage (there are always exceptions). Riders are usually packaged with certain policy types, though it is possible for policies to have a number of optional riders.
Cost Saving Riders
Insurance is a bet between the consumer and the company that an event will or will not come to pass. In the case of health insurance, the consumer is betting that sickness is inevitable, while the company bets it can be avoided. Some plans will feature impairment riders that exclude certain types of illness or injury. These reduce the cost of the plan while reducing the likelihood of a payout (i.e; College students get health insurance through school, but their plans rarely cover sickness or injury gained off-campus or while in a non-sober state).
Low Cost Riders
With insurance, a little goes a long way. Riders rarely add a large percentage to the cost of insurance, while they typically add quite a bit to the payout. One of the most common low-cost riders is the Waiver of Premium. In health insurance, this allows the consumer to miss scheduled premium payments while receiving the benefits of insurance. The likelihood of using this rider and the total cost of it to the company is built into the premium; there is often a maximum period of benefit.
Some health plans may feature a “multiple indemnity” rider, in which the consumer is paid a multiple of the agreed payout in certain situations. Health insurance is meant to cover the cost of medical care only, but cases of accidental death or dismemberment can have costs reaching beyond the hospital (especially if the consumer cannot resume work). Multiple indemnity riders are meant to replace lost income; they will be low-cost riders if the consumer does not have a hazardous occupation or hobby.
Workplaces engaged in group health insurance often attach “additional insured” riders to company plans, allowing workers to insure dependents. Depending on the type of rider (all dependents versus fee per dependent), this can be a low cost way to insure a family, as it will often offer less coverage to dependents. So, the primary insured (employee) may have 80% of prescription drug costs paid, while dependents have 30% paid.
Everyone is an individual. When purchasing insurance, the likelihood of using it and the real cost of going without should be considered carefully. If the insured is the primary wage-earner of a household, a Waiver of Premium can make an incredible difference if a small accident causes him/her to leave work for several months.
Related posts:
- What Does The Term Rider Mean For Low Cost Health Insurance?
- What Is A Cheap Health Insurance Rider?
- What Are Low Cost Health Insurance Riders?
- What Is A Consumer Directed Health Insurance Plan?
- What Is A High Deductible Health Insurance Plan?
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