Can NRIs Buy Health Insurance for their Parents Living in India?

An NRI is allowed to buy health insurance for themselves and their parents. But in most cases, health insurance providers only cover expenses incurred on the treatment availed within India unless the policy offers overseas coverage.

For example, if you are an NRI living in the U.S.A and seek medical treatment there, then health insurance bought in India won’t cover the expenses.

Did you know that a Non-resident Indian (NRI) who has a health insurance policy in India is eligible for a tax break?

NRIs are eligible to claim a tax deduction for paying the premium for their parents’ medical insurance from the taxable income in India as per the Income Tax Act.

That is right; a health insurance plan serves the dual purpose of medical coverage as well as tax-saving benefit.

NRIs can claim tax deduction up to specified limits for mediclaim policy premium as given to the Indian residents. It is eligible on health insurance premium paid for parents, self, spouse and dependent children. However, it is only valid on policies that are approved by the Insurance Regulatory and Development Authority of India (IRDAI).

The below table gives an idea of deduction available in different scenarios

Reasons NRI’s should invest in a health insurance policy for their parents

• Paying off medical bills can be strenuous for senior citizens, especially with an up rise in treatment costs for both minor and major illnesses.
• There is an increase in life expectancy in recent years, which indicates the longer lives of your parents. This means there will be an increase in the incidences of medical emergencies and treatment costs during that lifespan, especially in the old age. Therefore, buying a policy will keep you financially secured.
• Elderly parents are dependent mostly on their children for financial support unless they have a good pension provision.  Not everyone gets a pension in India; therefore, covering medical expenses with a health insurance plan would be a wise decision. 
• If your parents get a pension, it will lapse once they retire from their job.

What to Check in Health Insurance for Parents?

Here is a quick rundown of things you should consider before buying a health insurance for parents:

Age Limit

Many health insurance companies offer insurance plans for senior citizens who are 80 years or closer. But most of the insurers offer it for people who are 65 years of age and above. So, you need to assure that you buy a policy which offers cover to your parents from their current age to a maximum number of years.

And those, who are yet to buy a policy for their parents older than 65 years, they can still purchase it. Some plans have restricted entry and some plans offer open entry age, so it’s advisable to compare different plans and choose the one which fulfils your criteria. 

Amount of Sum Insured

This is the total amount that you will get after you claim your mediclaim policy with your insurer. Your insurance company would reimburse your medical expenses up to the amount that is assured in your policy. It depends on your budget, how much sum you want to get assured, the higher the amount, the more your parents would be recompensed against the medical bills. Therefore, you should get your parents an insurance policy offering the maximum cover from health risks and medical expenses.

Illnesses That Are Covered

People at an old age, most have some pre-existing illnesses. At the time of buying health insurance policy for your parents, check the diseases that are covered under the policy. Make sure the health insurance you choose, offers coverage against a larger number of existing and other critical illnesses.  There is usually a time period after which these illnesses are given a cover, so stay informed about those terms and conditions also.

Cashless Treatment

Health Insurers have a network of hospitals registered under their panel, where you can avail cashless treatment. Opting for a cashless facilitated insurance policy would ensure less hassle in sorting bills and payments when your parents are hospitalized. You can check which ones are covered under your parent’s health insurance plans.

Premium Amount

Medical cover for your parents can be little expensive, as the diseases which are given a cover, can be of serious and of critical nature, sometimes involving specialized treatment, surgery and operation from one of the best doctors in the city. Do not risk your parent’s health by picking a policy with a lesser premium. But this is subjective to your earning capacity and your parents’ health conditions.

Choose the best one, to the maximum of your paying capacity. This would also depend on your parent’s age, type of illness and diseases covered. It’s always sensible to buy senior citizen policy instead of getting your parents covered under the family insurance plan.

Policy Renewal

Policy renewal is an important step, especially for senior citizens. You need to check, if the insurance plan which you have purchased for your parents, can be renewed till what age and time. Different health insurance plans have different renewal age limits, and for parents it’s always better to go for lifetime policy renewal.

Some of the important features which NRIs’ must consider in any health insurance policy for their parents -

• Hospitalization charges, including ambulance, room and total medical expenses
• Cashless reimbursement of your bills, if you opt for that plan
• The cost of day care expenses can also be covered
• Coronavirus treatment cost
• Treatment of pre-existing diseases is also covered, if the similar plan is opted by you
• Medical screening should be optional as per the plan
• Choose the policy with maximum cover and higher amount of sum that is assured under your policy
• Seamless and quick claim settlement procedure

Long story short

During such vulnerable times like COVID-19, more and more people understand the need and purpose a health insurance plan serves. When it comes to buying health insurance for parents, even NRI’s are concerned. So, don’t let any financial burden deprive your parents of some good medical treatment, simply get them insured and let them enjoy their golden years in the pink of health, while your enjoy your peace of mind.