Taking Cover. Healthcare pangs for seniors

Have you retired from active work life and are looking to have a peaceful time over the next 20-30 years? A bit of planning can ensure this happens. If the family is not financially dependant on you, you don’t require life insurance.

But do buy a health insurance policy. Until a few years ago, insurers would decline seniors approaching them for a health insurance policy. In 2013, the insurance regulator however mandated that all health insurers accept people up to 65 and renew existing health policies lifelong.

Today, many insurers are open to covering seniors and there are a host of options for them — individual/floater, one/two year, and so on. But what is still a pain point is that these policies are quite expensive and come tagged with many ifs and buts.

Last Budget, the government increased the tax benefits on premiums paid on senior citizens’ health policies. But tax relief alone may not be enough. If something can be done to address the pitfalls in the existing schemes, it might help seniors breathe easy.

Public as well as private insurers offer health insurance covers for senior citizens.

Like regular health insurance policies, these cover hospitalisation expenses (doctor fees, medicines, room charges), cost incurred pre/post hospitalisation and day care treatment.

Pre-existing illnesses also get covered after few years of waiting. Some senior citizens’ policies offer ‘no-claim’ benefits too. The benefits increase by 5-10 per cent each year and go up to a maximum of 50 per cent of basic sum insured.

Also, akin to the regular health policies, insurers can’t raise premiums for individuals based on their claims for a year.

If premium increases have to be made, it can be done only on grounds of an increased outlay for the whole group and with IRDAI approval. Further, all insurers offer a cashless treatment under their senior policies, with network of at least 3,000-3,500 hospitals.

First, if you are a senior citizen with a history of a surgery or serious ailment, the chances of your getting a health insurance policy are very low. If you have good health, you may get one; but remember to read the policy document with a magnifying glass, as there are conditions attached to every benefit.

For instance, all senior health policies have a ‘co-payment’ clause which means that you have to cough up a portion of the medical bill. This can be anything upwards of 10 per cent.

In Star Health’s Red Carpet and Bajaj Allianz’s Silver Health, there is 50 per cent co-pay for all pre-existing illnesses. Generally, the waiting period for pre-existing diseases is 36-48 months but insurers who give a one or two year waiting period for pre-existing diseases, require higher co-pay from the policyholder. Religare Health’s Care, for instance, has a pre-existing waiting period of four years and co-payment is a relatively low 20 per cent (for policyholders above 60 years).

The other important thing to note is the coverage the policies offer. In Star health’s senior citizen policy, only specific day care procedures are covered. Bajaj Allianz’s plan covers 130 procedures and L&T’s Medisure Classic covers all of them.

With some policies you may have to even accept a raw deal as expenses on pre-hospitalisation period and domiciliary treatment may not be covered (as in Star health’s senior citizen policy).

Sub-limits (maximum limit under each expense) for various expenses should also be checked.

While room rent may have a cap of 1 per cent of sum insured and ICU rent a cap of 2 per cent of sum insured with most insurers, limits on surgery and domiciliary treatment will vary.

Buy a health insurance policy early in life. Before you enter your 60s, increase the sum insured sufficiently taking into consideration your healthcare expenses later in life. Most senior citizen policies give a sum insured of only up to ₹5 lakh; so you may not get sufficient coverage. When signing up for a policy, see if you are ok with the terms on co-payment, sub-limits, disease specific waiting period and coverage offered.

L&T Health’s Medisure Classic (provides no-claim bonus, pre-existing disease waiting period of 36 months) is one policy with a low co-payment requirement and you may consider it.

The policy requires you to cough up 10 per cent of the bill only after 80 years.