You cannot plan for retirement without considering the bottomless pit of medical expenses that come with old age. Of all age groups, older people are the most likely to be affected by health and lifestyle related illnesses.
An unexpected calamity like COVID-19 – which has also affected the elderly the most – has been a wake-up call for everyone to realize the caution of financially healthy health coverage. Hospitalization of older people infected with COVID is much more likely than younger age groups, according to the Centers for Disease Control and Prevention. Yet press reports claim India has a meager 18% percentage of older people covered by health insurance.
There could be several factors at play here. Traditionally, many people have relied on their children for support in their retirement years. Other times, they might not have enough financial buffer at this point to afford the best insurance plan. However, with an increasing number of empty nesters who wish to be self-sufficient, we are now slowly moving past this scenario.
If you’re looking for a health insurance plan for your elderly parents but don’t know how to navigate it, here are a few factors to consider:
Choose a plan with full coverage
You wouldn’t want to invest in a policy only to find out later that it doesn’t offer protection against certain serious illnesses, accidents or illnesses. Health issues are unpredictable, so it’s important to choose a policy that ticks the maximum number of boxes on your checklist. For example, some cases do not require hospitalization but OPD expenses or day care procedures can cost a fortune.
There are many plans that are specifically available for the elderly. However, they are generally recommended for people with pre-existing conditions, as these plans may come with certain limitations, such as mandatory user fees. The co-payment clause obliges the policyholder to pay a certain percentage of the total hospital bill. Also, the sum insured limit can go up to Rs 10-20 lakhs in these plans, while the regular plans have sum insured up to Rs 1 crore. If possible, it is advisable to go for a regular health plan to have more features and flexible options.
Higher sum insured
More than anything else, health insurance should serve its primary purpose of covering hospital bills at the time of need. The sum insured – the maximum amount paid by the insurer to the insured in the event of hospitalization – must adequately cover all costs. With age, the likelihood of contracting diseases tends to increase and recovery slows down. It is important that the policy covers the cost of a longer hospital stay or a repeat hospital stay if the condition requires it. The cost is even higher for metropolitan cities. There are several plans from insurers like Max Bupa health insurance or Care health insurance that offer coverage of up to 1 crore with a premium ranging from 6,000 to 8,000 per month for a 65 year old man and a 60 year old man. woman in a metropolitan city under the terms and conditions.
Take into account the waiting period
The waiting period refers to the length of time the policyholder must serve before their actual coverage begins. If the policyholder is found to be suffering from pre-existing conditions or comorbidities, the waiting period could increase to 3-4 years. If there is a possibility of hospitalization resulting from such a condition, one should plan ahead. Even if health problems arise unexpectedly, preparing in advance could help pass the waiting period and prevent your savings from eroding in the face of rising medical inflation.
However, there are some plans available that also cover pre-existing conditions from day one or have a waiting period as short as 30-40 days. Read your policy documents carefully to understand its conditions on the waiting period.
When choosing a policy for the elderly, look for additional features like exam coverage, pre and post hospital and ambulance costs, among others. Depending on the case, repeated hospitalization or multiple examinations and tests may be necessary. In the event of a medical emergency, the police should also be able to cover these additional costs. Also look for plans that also offer coverage for alternative medicine, like Ayurvedic or Unani treatment. Keep these additional features in mind when choosing a policy.
Home care coverage
Home treatment refers to the treatment of the patient at home when according to a doctor requires hospitalization. This usually happens due to the unavailability of the hospital room or the severity of the patient’s condition. We have just passed the second wave of COVID where the whole country experienced a severe shortage of hospital rooms. The situation could worsen further in the case of elderly people whose condition may not allow their transfer to a hospital. Therefore, it is best to take out a policy that also covers the cost of home treatment.
Also, it’s better to buy a plan separately for your elderly parents rather than making it part of your regular family floating plan. Not only to manage medical emergencies, the insurance plan also assists the elderly with tax benefits under Section 80D of the Income Tax Act.
The author, Amit Chhabra, is Health Insurance Manager at Policybazaar.com. Opinions expressed are personal