If Mint Money were to pick one of the most asked questions, it will be this: Which is a good health insurance policy for a 60-plus person? This is asked by senior citizens worried about lack of adequate cover or by 30-40 year olds, who are firmly caught in the sandwich generation—between minor kids and ageing parents. The common worry is about getting cover post 60-65 years and about getting cover long enough so that the growing lifespan does not mean unprotected years. The good news is that there are policies available that solve both the problems. Read on.
Unlike couple of years ago when it was difficult, if not impossible, for a person aged 50 years or above to shop for a health insurance plan, competition has solved this problem. It helped that the Insurance Regulatory and Development Authority (Irda), upset by the outright refusal by insurance companies to cover the silvers or charging exorbitant premiums, made it mandatory in May 2009 for insurance companies to offer health insurance plans till the entry age of 65 years.
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Of course, the need for a medical check-up remains. Says Antony Jacob, chief executive officer, Apollo Munich Health Insurance Co. Ltd: “For individual and family health insurance plans, we advocate a medical check-up for all members over 45 years of age and for those requesting for a sum insured of at least Rs 5 lakh.”
Depending upon the results of the check-up, the insurer can refuse a health insurance policy to the customer. However, a policy is refused only in extreme cases.
Says Kim Soon Chua, chief operating officer, Bharti AXA General Insurance Co. Ltd: “In case a person has diabetes then it is difficult to insure the person specially at a later stage because most complications and medical care will arise out of his diabetic condition. For us, it is no longer a risk but an eventuality.”
In cases where the insurer accepts to insure the policyholder, at least 50% of the cost of medical check-ups will have to be reimbursed. Says Sanjay Datta, head-customer service (health), ICICI Lombard General Insurance Co. Ltd: “The industry is increasingly getting customer friendly and for a healthy senior citizen, a fresh health insurance policy shouldn’t be a problem at least till the mandatory age of 65 years. We have been asked to specify clearly our reasons for refusing an individual a health insurance policy which has made the system transparent.”
Even for those above 65 years of age there are policies in the market. For instance, Max Bupa Health Insurance Co. Ltd does not have a maximum age at entry. Other companies such as Bajaj Allianz General Insurance Co. Ltd offer health insurance up to 70 years. But you will have to do your paces on the treadmill and get necessary tests done before the insurer agrees to cover you.
But getting a health insurance policy is not all that matters. You will have to keep a few caveats in mind if you are a senior citizen and shopping for a fresh health insurance cover.
Limited cover or higher premium: The older you get, the higher the chances that you would require medical care. Therefore, from the insurer’s point of view, the risk it takes to cover an elderly is higher. The insurer is bound to pay the sum insured, of which the premium is only a fraction. The older you are, the greater is the chance of the insurer shelling out that sum insured. Says Soon Chua: “We have a limit on our health insurance policy for senior citizens because we need to balance our risks. A health insurance policy, specifically for senior citizens, is a high utilization product. For that reason, we increase our premium for a senior citizen and offer limited sum insured to balance our risk.”
It is for this reason that getting a health insurance for a higher sum insured is difficult. Insurers, typically, restrict the sum insured for a senior citizen to Rs 3-4 lakh.
Insurers that offer a higher cover also charge a higher premium. According to Apnapaisa.com, for a 65-year-old and a sum insured of Rs 5 lakh, the cheapest premium is at Rs 15,262 by Future Generali India Insurance Co. Ltd, while the most expensive premium is at Rs 34,713 by Max Bupa.
Co-payment: Most health insurance policies covering senior citizens have a co-payment clause. A co-payment clause means that every time an insured makes a claim on his health insurance policy, he will have to bear a portion of the claim amount, according to a pre-decided percentage.
For instance, Max Bupa has a co-payment clause of 20%. Says Neeraj Basur, chief financial officer, Max Bupa: “We do not have any limit on the sum insured and our policy holders can choose a sum insured up to Rs 50 lakh. However, for individuals above 60 years of age, we have a co-payment of 20%.”
So if you bought a policy for a sum insured of Rs 2 lakh and your hospitalization expenditure comes to Rs 1 lakh, you will have to foot Rs 20,000 and the insurer will pay the remainder.
Pre-existing diseases: The biggest danger you face while buying a policy in later years is pre-existing diseases. When you buy a fresh policy even for the purpose of topping up your existing health insurance plan, any current ailment that you suffer are considered pre-existing. The ailment will not be covered for a waiting period of four years. Says Jacob: “At the time of retirement, an individual is more prone to illness as he or she is at a higher age. As a result, it becomes a tough task to find a comprehensive cover that suits an individual since all plans would come with a waiting period for pre-existing and specified diseases. Hence, it is advisable to have an individual plan early.”
How to choose
Though there is ample choice till you are 65 years of age, the choice suddenly tapers down as you advance in years. Notch up the sum insured and the choice will get restricted even in the 65 years age bracket.
If you are opting for a cover late in life, you must take extra care to go for one that can be renewed for lifetime, even if it comes at a cost. Stand-alone health insurance companies, typically, offer policies that can be renewed till the time you live and even have higher entry ages. For instance, Max Bupa’s Heartbeat Silver is a policy available to 70 year olds at an annual premium of Rs 23,277 for lifetime. But if you manage to insure by 65 years, you will get a cheaper lifetime option in Star Health’s Senior Citizen Red Carpet at Rs 9,326 per annum. Max Bupa has a lifetime option even for higher sums insured.
United India Insurance Co. Ltd will offer you cheaper lifetime options, but only till a certain sum insured.
The good news is there is hope even if you have reached the sunset years of your life, but the numbers prove that you shouldn’t delay buying a health insurance plan. Higher your age, the tougher it will be for you to buy a health plan.