Should Senior Citizens take up a Health Insurance Policy?
One has heard of a famous saying “From the bitterness of disease man learns the sweetness of health”. Old age is a time one is beset by a number of diseases. The body is frail and diseases creep in. One’s problem is compounded by very high medical costs and pricey medicines. There was a time a few years ago when everything including health insurance stopped at the age of 60 years. Even when health policies were available the premium one had to pay was ridiculously high it served to discourage rather than encourage. Surely a bitterpill to swallow. There are several benefits of health insurance policy. Remember the famous quote”If you do not take care of your body where are you going to live”.
Why was one not provided a health cover by the insurer after he reached the age of 60?
One knows health insurance acts on a pooling mechanism. The insurance Companies collect premium from a large pool of people and provide health cover when one is diseased from this pool of funds. The idea is that when one is young and healthy the chance of a critical illness is low and the premium paid is also low. One’s premium increases with age. When one is above 60 years the chance of a critical illness is high and insurance Companies would suffer losses and hence declined to provide a health cover after one crossed this age limit. If one had a health policy throughout his life and paid the premium it would be a gross injustice not to be covered by a health policy when one needed it the most. Imagine a costly critical illness with no health cover. Remember diseases arrive on horseback and leave on foot.
What are the salient features one is provided in a senior citizen health insurance policy?
- One of the most important features in a health plan for a senior citizen is the entry age. Many health plans offer an entry age for first time buyers at 65 -75 years while some Companies do not offer any limit. One can enter these polices at any age.
- One can obtain lifetime renewability in the health insurance policy. Earlier one would regularly pay all premiums and have a sound health cover across his working lifetime. One would not be able to renew the health policy after the age of 70 years in spite of being ready to pay a higher premium as the insurer would not provide a renewability option. Imagine if one suffered a critical illness at 75 years what would be the cost? As per new rules all health policies must offer a lifetime renewability clause.
- If one is a senior citizen the sum assured or the maximum health cover was INR 5 Lakhs. Now health policies are available where the health cover is much higher up to even 50 Lakhs. This is offered only by a select few Insurers.
- One is covered for coronary artery surgery, kidney failure, stroke, major organ transplants, cancer, eye diseases, benign prostrate, chronic lung diseases, accidents, knee surgeries and even cardiovascular diseases. If one pays a slightly higher premium even paralysis is covered.
- One’s health policy also covers hospital room, ICU charges and also nursing charges. Doctor’s fees as well as medicines, blood , anesthesia, oxygen and X-ray charges are covered. One might also be covered for the costs incurred on artificial limbs, prosthetic devices as well as a pacemaker.
- One is covered in a health policy for pre hospitalization and post hospitalization charges of 30 days and 60 days as well as ambulance charges.
- Most of these policies offer a coverage of 1 Lakh to 2 Lakhs with a maximum sum assured of INR 5 Lakhs with a critical illness cover. Certain insurers provide special health cover over 50 Lakhs at higher premiums.
- One pays a premium ranging from INR 5000-INR 9000 for a sum assured or a health cover of 1-2 Lakhs if he is 60-70 years of age on an annual basis. The premiums increase to INR 9000-INR 24000 for the same sum assured at 70-80 years. If one is over 80 years the premiums could be as high as INR 24000-40000.
- One needs to undergo medical tests to identify pre-existing diseases and these have to be borne out of one’s own pocket. If one is already covered for 3 years or more by a health policy just preceding this period by the same insurer then the medical is waived off .Medicals include blood test, urine test, eye check up and blood pressure/sugar tests. Pre-existing diseases such as diabetes and hypertension might be covered after a two year continuous renewal.
- Senior citizens get a tax deduction under Section 80 D on the health insurance premium paid up to INR 20000.
What clauses must one beware of in his health policy if he is a senior citizen?
- Exclusions : One needs to beware of the exclusions in a senior citizen health insurance policy. The diseases not covered include pre-existing diseases for the first 2 years, diseases contracted within a month of taking up a policy excluding accidental injury, Aids and Sexually transmitted diseases, Vaccination and inoculation charges, Dental treatment unless arising from injury ,Cost of spectacles, hearing aids and contact lenses. If one wants to know about any further exclusions he has to look up the health policy documents. Arthritis, Cataract, benign prostate surgery or problems relating to osteoporosis are covered after a 2 year exclusion period.
- Copayment clause : If one is a senior citizen he may incur a very high medical expense for a critical illness. The insurer would not be willing to bear the entire expense. If one has a copayment clause in the health insurance policy he pays a part of the medical expense incurred as a fixed percentage and the remaining portion is borne by the insurer. A health policy with a co payment clause costs a lower premium. If one opts for a co payment of 20% then he gets a discount of 20% on the premium paid depending on the clauses in the policy. One should always opt for a very low co payment but this comes at a higher premium.
- Sublimits :As one knows this is basically a limit set by the insurer on the coverage. This means that the insurer is not willing to pay beyond a certain limit for a health condition. This is most common in surgeries where the health policy pays only up to a certain limit. One has to bear all the costs beyond this point. One might also face sublimits on charges such as doctor’s fees, pacemaker and diagnostic tests.
Should one opt for a top up health plan or a super top up health plan if he is a senior citizen?
If one is a senior citizen and incurs a very high medical bill due to a critical illness his finances are in a mess. The ordinary health policy might not suffice in such a situation as the health coverage is very low. In this situation one is greatly aided by a top up health plan. If one takes up this plan say for an amount of INR 5 Lakhs the Insurance Company will not pay any amount for an illness below this amount .Ones senior citizen health policy covers this cost. If the threshold of 5 Lakhs is breached then the health policy kicks in. One is prevented from getting caught off guard by a sudden critical illness such as a heart attack in a particular year leaving finances in a mess.
The premiums are low in this kind of a policy. One can also opt for a super top policy where if one incurs a medical expense of say INR 3 Lakhs twice in a year which translates to 6 Lakhs the top up policy is of no use as the threshold limit of INR 5 Lakhs is not breached. One is covered by the super top up policy in such a situation as it considers the total medical bill one incurs and not just a single threshold. One has to pay very low premiums in such a policy. There is a famous saying ”The greatest wealth is health”. The next best thing for a senior citizen is a health policy. If one is a senior citizen a health insurance policy is a must and one cannot afford not to have health cover even for a day. Sure one has the dilemma of whether to continue a policy at a high premium. Can’t one survive on his investment and retirement corpus? The answer is simple. Even at a higher premium a senior citizen health policy is the best option.