Health insurance for senior citizens

If you retired from a job without a health insurance cover, you can buy plans targeted at senior citizens. But they have limitations that you must know about

Without adequate insurance, a medical emergency can be a severe financial set-back; especially in old age, when medical care is more important and many of the procedures can be expensive. Due to this reason, “There are quite a few products by insurance companies focussed on senior citizens. Technically, some of these are not exclusively limited to senior citizens but they are designed in such a way that they become more attractive for them, in terms of coverage, pricing and issuance processes," said Anuj Gulati, chief executive officer, Religare Health Insurance Co. Ltd. However, there are others who say that these do not address all needs of the elderly. Dhruv Sarin, head-health insurance,, said, “For a senior citizen, there are a many value-added services such as home care, or wellness-related services; these are not covered." Thus, choosing such a policy is not easy. If you are planning to buy a senior citizen cover, here are some of the important factors to consider. 

According to Sarin, a health insurance policy designed for senior citizens has more restrictions in the form of cost caps and sub-limits for certain ailments because the risk profile of a senior citizen is much higher. But what helps is that they may have a lower waiting period on pre-existing ailments. Typically a health insurance policy does not cover any pre-existing ailment in the first 4 years. While some regular plans may have lower waiting periods, those aimed at senior citizens are usually characterised by smaller waiting periods. “Senior citizens are more likely to have some form of disease and a waiting for 4 years could make the product ineffective for them," said Gulati. In fact in regular policies ailments like diabetes or hypertension either come with a waiting period or are permanently excluded and the insurer can also deny you a cover if you have had these ailments for long. But, policies aimed at senior citizens could cover these. But these policies could also have caps and waiting periods that are not a part of regular health policies. There could be limits on treatment for cataract, fractures, and joint replacement surgeries.

Premiums for insurance increase with age. But it is difficult to compare the premium for a product that is specific to a senior citizen with a generic product, because typically a senior citizen cover would have modifications and customisations to make it more suitable for the target buyers, Gulati said. “The pricing may not be a copy, but broadly the pricing of senior citizen products is similar or less than what it is for other insurance products bought at the same age," he said. The reason for this is that even though the premium may be more for a higher risk category, to make the policy more attractive to consumers, the premium may be kept lower. One must, however, remember that this reduction of premium is compensated by consumers in the form of co-pays and sub-limits. Most senior citizen-focussed policies have co-pay clauses, even though it may not be at the same level across the board. “If you enter a policy after age 60, there might be a standard co-pay or reducing co-pay. In all the policies for senior citizens, if there is a medical history, there is either a co-pay, or illness specific sub-limits, or both," said Sarin. 

A co-pay clause means that you will have to share the claim burden. Typically, insurers insert this clause where risk is high. A 10% co-pay clause would mean that you pay 10% of the claim amount and the insurer will pay the remainder.

While senior citizen-focussed policies cover illnesses and treatments for degenerative joint problems, chronic lung diseases and heart-related problems; one has to consider several factors before buying them. Some of these are: waiting periods, ease of buying the policy, pre-acceptance medical screening and coverage for out-patient services, said Dr S. Prakash, chief operating officer, Star Health Insurance. 

According to Sarin, the most important aspects to look at are: co-pay and waiting period for pre-existing diseases. “You should see if there is any cap on room rent in case of hospitalisation. Typically, there is no room rent cap on policies with a cover of over Rs5 lakh. Another important feature is restoration of the benefit," he said. 

If a senior citizen does not have health insurance already, then these policies can be a good choice. “I would recommend a senior citizen policy to someone because typically such a policy would be more affordable (at that age) compared to a policy with no co-pay or sub-limits," Gulati said. Senior citizen plans are affordable and if you have health conditions, chances of getting a senior citizen policy are much higher than getting a regular insurance plan. A regular health insurance plan is recommended if you find the premiums affordable. But if you decide to buy a plan that’s specifically designed for senior citizens, please understand the policy restrictions carefully. If you are currently covered by your employer’s health insurance plan, we do not recommend that you wait till your retirement to buy a health cover. “By the time you reach the age of 60 with that same policy, your waiting period will be over," said Gulati.