Health insurance riders can expand coverage, institute coverage limitations, or exclusions. These riders, called, endorsements can reduce insurance costs as the addendum becomes a part of the health insurance policy contract and eliminates the need for underwriting to draft a new policy or rewrite the policy. Riders that expand coverage increase the overall cost of the policy. It is important to review the terminology to have a clear understanding of exactly what the riders encompass.

Exclusion denies coverage for an illness or medications. Some insured do not obtain health insurance until they need the benefit, called "adverse selection." Most states permit the insurer to review the person's previous medical history for inconsistencies. For example, a person with arrhythmias controlled by medications may have an exclusion codicil instituted that will deny any benefits for heart related illnesses. The other alternative is to create an addendum with an expensive premium but cover cardiac dysfunction, or the insured can accept the exclusion for a lower premium and pay any cardiac related expenses out of pocket. Therefore, it is important to be aware of the verbiage and comprehend the provisions of the exclusion.

A benefit limitation rider will restrict the amount of coverage for specific conditions or in the codicil stipulate that related expenses will not be covered for a specific period of time, for example 180 days; during the interim related expenses are the insured's financial responsibility.

The long-term care rider, for example, should be carefully examined to ensure that it provides the necessary services and equipment. The rider may cover long-term care, unskilled nursing, but omit respite care, durable equipment coverage, or therapy. Therefore, it is critical to review the inclusions with the health insurance representative, make inquiries, and make necessary requests to ensure that the policy sufficiently addresses needs.

The extended stay rider is consequential for catastrophic illness. Many health insurance policies have limitations regarding extended stays. The rider, a cost issue, provides additional hospitalization days per incident. Consequently, policyholders should be realistic and evaluate the riders to insure that provisions are adequate and generous enough to accommodate a critical illness.

Finally, it is important for prospective insured to read and understand the policy riders, ask questions, and be pro-active. Health insurance policy riders can change the entire scope of the policy by exclusions, inclusions, or increased premiums in order to accommodate medical expenses. The insured must assume the responsibility and ensure that the terms of the riders are consistent with the needs. These riders can prepare and protect the insured from financial concerns and ensure excellent medical care.