The CEO of a leading general insurance company once told me that even life insurance is optional, but everyone in the country needs a health insurance policy.

Of course, the sad thing is that we continue to talk only about the lucky 11 per cent or so who are willing to, or can afford to buy commercial insurance.

It is a no-brainer that healthcare requirements can zoom as one ages, and so the expenses. The sad corollary is that that’s when it gets more difficult to get health insurance because, in a cynical way, the insurer too is careful of his risks.

That’s why we keep saying in CoverNote that you should start your insurance early. It is true for life insurance, it’s true for annuities or pension plans and it’s certainly true for health insurance, where you can build up your track record, work off your waiting period for different treatments, and even shore up your sum insured as you go through claim-free years. There have been some regulatory moves to make health insurance more available to senior citizens. Under the Health Insurance Regulations, 2016, IRDAI had asked insurance companies to offer hospitalisation insurance at least up to 65 years. Companies were free to offer cover to older customers, and many did so.

Insurers wary

On the ground, however, it was not easy going to actually get a policy due to underwriting caution by the insurers. IRDAI has removed this age cap with effect from April 1, 2024. This is a theoretical benefit as the underwriting decision is still with the underwriter – the insurance company. It may open up the market and smart marketers may find ways to explore this market and introduce more products and finer underwriting. It’s not going to be any easier to actually get a policy because pre-existing disease exclusions, higher premiums and stringent terms and conditions will all definitely be part of the package. But there has been relief on that front too. Just a few days before this announcement, the regulator had eased things up a bit. The waiting period for pre-existing diseases was reduced to three years, while it was at least four years in many companies.

Another measure was reducing the moratorium for rejecting any claim on the basis of non-disclosure or misrepresentation to five years from eight years. But years look like decades when you are older.

Starting your health policy at a younger age means you won’t need to wait to make claims at older ages when the need is higher.

(The writer is a business journalist specialising in insurance & corporate history)

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