Buying Health Insurance For Your Parents? Here's What You Should Know

There is no denying the fact that parents brave all challenges that shape our lives. They give us the best of everything even before we ask them. So, it’s our responsibility to take care of their well-being, and investing in health insurance is the most crucial thing to do so. It will keep them financially stable during old age when they are prone to unavoidable health issues.

Old age opens doors to a number of health complications and vulnerabilities. It is associated with a gradual decrease in physical and mental strength and loss of immunity. Moreover, the risk of lifestyle diseases including diabetes, hypertension is high in India. Also, medical inflation is increasing at double the rate of overall inflation in India. Cancer treatment in metro cities can cost as high as Rs 15 lacs. A liver transplant can cost between Rs 18-22 lacs. Lung transplant costs Rs 20-25 lacs. Paying these exorbitant hospital bills immediately can burn a hole in your pocket. So, if you have health insurance, neither you nor your parents will have to arrange funds in a hurry at the time of a medical emergency and it would lessen your family’s stress.

Apart from a host of benefits, a tax concession is also provided on the premium paid towards a health insurance policy. Premium paid on health insurance is tax-deductible under Section 80 D of the Income Tax Act. You can save up to Rs 25,000 on the premium paid for self, spouse, and children and can save additional Rs 25,000 if your parents are also having health insurance. However, if your parents are above the age of 60 years, you can avail tax exemption of Rs 50,000.

You should buy health insurance at an early age. This is because while most health insurance policies do offer health insurance to senior citizens, some policies come with a maximum age of entry. Moreover, health insurance premium increases with age as it is believed that with rising age, chances of health problems also rise and that is why the premium amount rises. Thirdly, when it comes to healthcare expenses, senior citizens face a double whammy. While post-retirement their income drops substantially, the inflation in healthcare costs proves to be a big drain on their retirement savings. Therefore, it is prudent to buy a health insurance policy when your parents are healthy and young.

Today, there is a range of health insurance products available for the elderly. If you have dependent parents, buying a good cover for them makes for a sound financial decision. It is advisable that if the person’s age is under 60 years, they should opt for a regular health insurance plan because they are rich in features. The minimum sum insured that senior citizens must opt for is Rs 10 lakh.

However, if the age of the individual is above 60 years and they are not eligible for a normal health insurance plan, then they should opt for a senior citizen-specific plan. They have a lesser waiting period on existing illnesses as compared to regular health insurance plans. However, one should check for co-payments and sub-limits before buying senior citizen-specific plans.

Let’s understand what co-payment and sub-limit mean. Co-payment means sharing medical expenses with the insurer. They are applicable for: specified ailments, specified hospital charges, and hospital treatment.

Sub-limits are certain caps placed by health insurance companies in the form of a limit that is pre-determined, on the claim amount for a specific disease and/or treatment procedure.

Things to keep in mind before buying a health cover for your parents
If your parents’ age is less than 60 years and they don’t have a pre-existing disease, then buying a family floater health insurance plan is a good option. Family floater health plans are specifically designed to offer insurance coverage to the entire family, including dependent parents. Some of these plans impose a limit on the age of parents and some charge a high premium but they provide more features.

You can also buy an independent policy rather than a group policy as a group cover does not always include pre-existing diseases. However, in an independent policy, most of the pre-existing diseases get covered and even the chances of claims getting approved are highest.

Some key factors which you should consider before buying a health cover for the elderly:

Entry age: Most of the insurers in India have entry age criteria that must be fulfilled by the consumer before buying a health insurance policy. Entry age plays a big role in determining the premium of the policy. Different insurers have different criteria for age. One must check this before buying a health cover.

The extent of coverage: You must make sure to buy a health cover that offers comprehensive coverage. Pick a plan that offers adequate coverage against critical illnesses and particularly pre-existing diseases. Though most of the insurers provide coverage against these diseases after a waiting period which is typically 2 or 3 years, it is always advised to review your policy document to understand the conditions carefully.

Sum assured: The minimum coverage for an individual living in a metro city should be Rs 10 lacs keeping in mind the medical inflation and health care costs these days. It is also important to check the features of the product before buying a health cover and don’t just rely on a higher sum assured.

Buy a critical illness cover: Along with a regular health plan, you should also buy a critical illness cover for your parents because the risk for them to get a life-threatening illness at an older age is high such as cancer, heart attack, renal failure, etc. A critical illness cover provides you a lump sum amount upon diagnosis of covered critical illnesses under the plan. Under critical illness covers, hospitalization is not required, diagnosis is enough to get a lump sum amount, unlike a regular health insurance plan.

Buy a top-up: You can also expand your sum insured by buying a top-up plan over and above the base plan. It provides additional coverage to a health insurance plan over and above the current limit at a lower premium amount. Under a normal health insurance plan, there could be cases when the medical expenses exceed the amount of the sum assured in your health insurance plan, a top-up helps in such cases.