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Having a health insurance policy is an absolute must nowadays. More so for senior citizens, as the health risks keep increasing with age.
The market is flooded with various types of healthcare plans, where comparing policies becomes a challenge at times. Furthermore, interpreting the language can get confusing since the sub-limits, exclusions and other terms and conditions are hidden in the fine print of the policy.
It is because of this that we sometimes end up buying a policy while considering only the cost - a decision that comes at a heavy price, since it could lead to the rejection of claims or settlements. This is especially risky when it comes to senior citizens, as income stops post retirement in the midst of consistently rising healthcare costs.
So how does one go about picking the right healthcare plan for a senior member of one’s family? The following are the considerations to be borne in mind, when buying healthcare for senior citizens:
Types of Health Insurance plans that provide cover for senior citizens:
The following are the types of health insurance plans under which, senior citizens are provided coverage:
These plans provide individual cover for a range of illnesses, as well as added benefits that match individual needs.
Many employers offer health insurance to their employees, with cover extended to family members as well. While this is beneficial to salaried individuals, these plans might not provide sufficient cover to senior citizens. Furthermore, employers are nowadays either placing restrictions on such plans, or withdrawing parental coverage altogether, which is why purchasing additional health insurance becomes a necessity. Know More About Group Health Insurance Policies
Family Floater Plans
Under family floater plans, the entire family is insured under one plan. Claims can be made for the entire claim amount by one family member, or individual claims can be made by individual family members up to the sum insured. Though family floater plans might seem more economical, in the case of insuring elderly parents, or senior citizens, it is generally recommended that individual plans be purchased for them. This is because the chances of claims are higher with older-aged individuals, which would exhaust the plan in no time, leaving no insurance cover for other family members. Also, one might end up paying higher premiums under family floater plans if senior citizens are included in such a plan, as the premium for such plans is based on the age of the oldest member covered by the policy. Read More about Family Floater Plan
Senior Citizens Plans
As per IRDA norms, all insurance companies have been mandated to provide insurance for individuals up to the age of 65 years. Insurance companies have created special dedicated individual policies for senior citizens, where the waiting period is relatively lower for pre-existing illnesses, in comparison to regular individual policies. Most standard policies have a waiting period of 4 years. This is not so with senior citizen health insurance, which have a waiting period of 1-2 years. Senior citizen plans are designed for those individuals who have not purchased an individual plan until they reached the age of 61.
Sometimes, buying an individual plan in addition to a group plan might not fit in one’s budget. In such cases, a top-up plan might prove to be beneficial. Top-up plans take care of higher claims and are usually cheaper than individual plans, including senior citizen plans. Furthermore, the maximum coverage provided by top-up plans is generally higher than that of senior citizen plans.
Policy Additions and Limits Beneficial For Senior Citizens
There are policy additions offered under health insurance plans, which are relevant to senior citizens. The following are the policy additions that one should bear in mind:
Critical Illness cover
Critical illness cover can be taken either as a standalone policy or in addition to an individual plan. Under this plan, there is a list of pre-defined illnesses that are covered. They can include heart disease, liver failure and cancer - diseases that generally cost large sums of money.Under such plans, premiums are higher as a result.
Most health plans do not cover pre-existing diseases, especially in the case of senior citizens. There is a 2-4 year waiting period, after which, pre-existing ailments are covered provided the ailment is not terminal or critical. Furthermore, hospitalisation charges for accidents and ailments are covered under insurance plans till the waiting period is completed. While settling on an insurance plan, one must check the list of diseases covered by the plan, and accordingly select the plan especially if the senior citizen needs coverage for a specific pre-existing disease.
Health insurance plans for the elderly include insurance sub-limits for specific diseases like cataract surgeries or angioplasty for instance. Thus, the insurer would not offer coverage over a set pre-determined limit for that particular disease. In order to avoid situations where the claim would be rejected on these grounds, it is advised that sub-limits of various policies be compared and the plan that fits in with the individual’s health history be considered.
Health insurance for elderly individuals generally comes with a co-payment clause, where the policyholder is required to pay a fixed percentage of the medical expenses out of their own pocket. This is to safeguard insurers against the risk of having to clear high-cost claims. For instance, in the case of a 70:30 co-payment clause, the policyholder would have to bear the cost of 30% of the medical expenses. The higher the co-payment percentage, the lower the annual premium as the risk borne by the insurer is less.
A deductible is the amount to be paid by the policyholder before the insurance coverage comes into play. Ideally, one should opt for a plan that has the least deductible clause.
Other Aspects To Bear in Mind While Selecting Senior Citizen Health Insurance Policies
Health insurance comes with an initial waiting period, a waiting period for pre-existing diseases and for specific illnesses. The initial waiting period is generally the first 30 days from the date of the policy being issued, except in the case of accidental injuries or hospitalisation.
In the case of pre-existing diseases, most insurers have a 2-4 year waiting period, whereas for illness-specific diseases, the waiting period is around 2 years.
All health insurance policies have an age limit. Generally, health insurance policies for the elderly are in force till they reach the age of 90. However, some companies off-late have started offering lifelong renewal policies. These policies are preferred to those that have specific age limits. The earlier one purchases a policy for a senior citizen, the better as the premiums increase with age. Also, the older one gets, the harder it is to find good health coverage at an economical rate.
Sum Insured and premiums
Before choosing a policy, one needs to conduct some research to understand the actual medical charges for the year before determining what the ideal sum insured should be. The sum insured should also factor in inflation. Ideally, a cover of at least Rs.5 lakh should be sought.
While purchasing a policy, one should also bear in mind the fact that there might possibly be an increase in premiums while renewing the policy.
All health insurance policies list a network of hospitals where the policyholder can pay the medical bills and have it reimbursed by the insurer, or opt for cashless treatment, where the insurance company settles the bill directly with the hospital. This benefit can only be enjoyed at the hospital network listed in the policy. The policyholder would have to inform the insurer in advance that they would have to avail of medical treatment. One should ideally check the network hospitals before settling on a policy, to ensure that their preferred hospital or medical centre is on the list.
One needs to provide the insurer, accurate information about existing health ailments of the individual. Upon submission of the proposal form, the insurance company would go through the medical conditions and would schedule a medical check-up where 11-13 tests would be conducted, based on the health condition of the individual. These tests would include sugar, urine, lipid profile, blood routine, liver function, kidney function, serum creatinine, sonography (for women) and PSA (for men).
Benefits on opting for Senior Citizen Health Insurance
- Daycare costs: Costs for procedures like dialysis or chemotherapy, or for using particular types of medical equipment.
- Pre and post-hospitalisation medical costs: The number of days covered varies from one insurance policy to the next.
- Ambulance charges: Though ambulance costs are covered, these costs could be subject to a maximum limit.
- Hospitalisation charges: If hospitalisation is more than 24 hours, expenses like doctor fees, room charges, nursing fees and cost of medicines are covered
Policy Exclusions in Senior Citizen Health Insurance
The following is the list of some of the exclusions generally seen in a senior citizen health insurance policy:
- Pre-existing diseases or injuries
- Self-inflicted injuries
- Diseases that are contracted within 30 days of availing the policy
- Treatment of AIDS
- Costs of lenses or spectacles
- Dental treatment (unless the treatment has arisen due to an accident)
- Cosmetic surgery
- Injuries caused due to the act of a foreign army or war
- Expenses which are as a result of drug abuse
- Treatments like joint replacement, etc. are covered upon the completion of 2 years of availing the policy
- Non-allopathic treatment
Tax Benefits on Buying Health Insurance for Senior Citizens
Under Section 80D of the Income Tax Act of 1961, payments made by senior citizens towards health insurance premiums enjoy tax exemptions. Senior citizens can thus avail of deductions amounting to Rs.30,000 from the assessment year 2016-2017.
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