Hospital Income Rider

When considered in relation to the importance of the other riders we have examined, the Hospital Income Rider is a minor rider.  The rider has two basic designs:

An additional benefit paid ,and
A waiver of the elimination period

Under the first design, a Hospital Income Rider might provide $100 per day for each day the insured is in the hospital.  For example, suppose a disability income policy contained a $100 per day hospital income benefit and a $4,500 per month disability income benefit payable after a 60 day elimination period.

If the insured were hospitalized, the hospital income benefit would begin paying a benefit of $100 per day immediately.  By the end of 15 hospital days the insured would have received $1,500.  However, since the 60 day elimination period had not been satisfied, basic disability income benefits would not have been payable.

A Hospital Income Rider designed in the second way would have paid no specific "hospital" benefit.  It simply would have waived the elimination period, and the $150 per day basic disability income benefits would have been payable immediately.  The result, assuming the same facts, would have been a payment to the policyowner of $2,250.  When designed in this second way, the Hospital Income Rider is referred to as a "first day hospital" benefit.