Insurance Deep Dive: Riders & Claims

Buying insurance is easy. Getting a claim is hard. The difference lies in understanding the "Terms & Conditions."

1. What are Riders?

Riders are "Add-ons" to your base policy. Like extra cheese on a pizza. They cost extra but provide specific protection.

Important Riders for Term Insurance

1. Accidental Death Benefit: Pays extra (e.g., Double Sum Assured) if death happens due to accident.
   • Verdict: Good to have. Cheap.
2. Critical Illness Rider: Pays a lump sum if diagnosed with cancer, heart attack, etc.
   • Verdict: Avoid. Buy a separate standalone Critical Illness policy instead (better coverage).
3. Waiver of Premium: If you get disabled, future premiums are waived off.
   • Verdict: Must Have.

Important Riders for Health Insurance

1. Room Rent Waiver: Removes the cap on room rent (e.g., "1% of Sum Insured").
   • Verdict: Must Have. Room rent limits are the #1 reason for partial claim rejection.
2. Consumables Cover: Pays for gloves, masks, PPE kits (which are usually not covered).
   • Verdict: Highly Recommended.
3. No Claim Bonus (NCB) Protection: Prevents NCB from dropping after a claim.

2. Claim Settlement Ratio (CSR)

CSR = (Claims Settled / Claims Received) %.

• Example: CSR of 98% means out of 100 claims, company paid 98.

The Truth:

• For Term Insurance: CSR is critical. Look for > 98%.
• For Health Insurance: CSR is less important because "Incurred Claim Ratio" (ICR) matters more. Also, rejection often happens due to "Exclusions."

3. Waiting Periods & Exclusions

Every health policy has a "Cooling-off" period.

1. Initial Waiting Period: 30 days. No claims accepted (except Accident).
2. Specific Disease Waiting Period: 2 years. For slow-developing diseases like Cataract, Hernia, Stones.
3. Pre-existing Disease (PED) Waiting Period: 2-4 years. For diseases you ALREADY had (Diabetes, BP).

Moral: Buy insurance when you are healthy! Once you get Diabetes, the waiting period applies.

4. Cashless vs Reimbursement

• Cashless: Hospital talks to Insurer. You pay nothing (except non-medical items).
  • Requires: Network Hospital.
• Reimbursement: You pay bill, then submit docs to Insurer to get money back.
  • Requires: Lots of paperwork.

Tip: Always prefer Network Hospitals for Cashless.

7-Day Action Plan

Day 1: Open your Health Insurance Policy document (PDF).
Day 2: Search for "Room Rent Capping". If it exists, try to port your policy or buy a rider to remove it.
Day 3: Check "Waiting Period" clause. When does your PED cover start?
Day 4: Check your Term Insurance. Do you have "Waiver of Premium" rider?
Day 5: Find the list of "Network Hospitals" near your home.
Day 6: Save the TPA (Third Party Administrator) number in your phone.
Day 7: Tell your spouse/nominee where the physical policy papers are kept.

Quiz

💡 Final Wisdom: Insurance is a contract, not a promise. Read the contract. If you don't understand it, ask.