A quick guide to riders in insurance products

 When looking up insurance products like life insurance or health insurance, you might have also come across ‘riders’ (or supplementary benefits) for various plans. These are additional covers that help supplement the coverage you receive from a base insurance plan. Riders not only supplement your coverage but also customise it – you can uniquely opt for a rider that suits your needs for coverage. Thus, your final plan (with a rider) may be different in terms of overall coverage from someone else’s version of the same plan.

Some examples of riders in major insurance products

Almost all insurance products have options of riders for you to choose from. Let’s take a look at some examples.

·         Life insurance – Life insurance plans generally do not cover critical illnesses; you can add coverage for these as a rider. Life insurance plans also have riders that allow for premiums to get waived for a certain number of years if the policyholder is diagnosed with early or intermediate stage health conditions. This premium holiday rider can help you focus on your health and recovery without worrying about your policy lapsing.

·         Health insurance – Health insurance plans in Singapore allow you to opt in for a co-pay rider with which the insurer pays up to 95% of your treatment costs.

·         Personal accident insurance – Buying a personal accident insurance policy provides you with the option of adding on riders that cover extra medical expenses for burns, broken bones and fractures. Another rider gives you daily cash allowance if you are admitted to the ICU after an accident.

Do note that microinsurance plans may not have riders as these are bite-sized plans created to give coverage at affordable costs.

How do I select the right riders for my insurance plan?

The availability of riders is indeed a boon for anyone looking to customise insurance to suit their unique needs. As seen from the examples listed above, riders bring so much in terms of value to your plan coverage. However, they do come at an added cost to your insurance plan’s premium. This might make you wonder whether you should skip out on these riders to save on insurance costs.

Missing out on the benefits of a rider that might prove handy during a claim is probably not the best situation. At the same time, it is probably unwise to simply select every available rider option. What you can do instead do is strike a balance between the riders available and your specific needs. To that effect, here are some tips that might prove helpful –

·         Examine existing coverage

When considering a rider, look to see whether you already enjoy similar coverage elsewhere. For instance, if you already have a standalone critical illness insurance plan, you might not need to add a critical illnesses rider for your life insurance plan.

·         Check affordability

Most people are unaware that riders cannot be paid for from MediSave funds. Since you will be putting in money from your salary or savings towards buying these riders, do check how much you can afford. Set a budget and check how many useful riders fit within that. You might want to consider getting coverage you can comfortably afford.

·         Seek professional advice

The wide array of riders offered by insurance companies can confuse you, even if you are not buying insurance for the first time. If you need further help understanding the use of each rider, consider talking to a financial consultant or a customer service professional from the insurance company. They will be able to answer your queries, provide advice and you can then make an informed choice.

Hope that this article has helped you understand insurance riders better. Good luck!