Few health cover options for parents

While individual policies are expensive, consider family floater only for parents or top-up on group cover

Health insurance still does not feature in the shopping list of most. But the few who think it is important, tend to cover only spouse and children. They do not feel the need to cover parents. This is according to an analysis done by insurance aggregator policybazaar.com.

Says Yashish Dahiya, co-founder and chief executive officer of policybazaar.com, “We looked at health insurance bought online. And we saw that barely three per cent buyers bought cover for their parents. This is despite the tax advantage on paying premiums towards health insurance of parents.” He says one of the many reasons could be that the best insurance plans are not available for parents. And there is a chance that one needs to pay Rs 6,000-7,000 higher premium for parents. Others say there is a dearth of family floaters covering parents. Some companies like Oriental India Insurance (Happy Family Floater), Max Bupa (Family First), Aegon Religare Life Insurance (iHealth) and Bajaj Allianz Life Insurance (Family CareFirst) offer cover for parents.

Here’s how the premiums compare – Max Bupa Family First costs you Rs 39,500 to Rs 63,000 for a cover of Rs 3 lakh for a family for four adults (aged 28, 30, 56 and 63). Instead, if you plan to buy a family floater for those below the age of 40-45 and individual cover for those above 45, you would incur a total annual cost of around Rs 46,000. Family floater for two adults would cost Rs 8,099 (age 28 and 30) and individual plans for parents will cost Rs 23,000 (age 63) and Rs 15,000 (age 56).  Cost-wise family floaters work better. The premium (of individual plans for parents) will always be higher than family floaters. But in either case the premiums go up if even one parent is a senior citizen. Hence, says Amit Sinha of SecureNow Insurance Broker, “If parents are in their fifties and in the pink of health, then a family floater can be considered. Otherwise, it does not make sense even though individual plans are costlier.”

The other option Sinha gives is to buy a separate family floater for parents and a separate one for younger family members. Your parents’ cover can cost between Rs 31,000 and Rs 50,000 with Max Bupa’s plan and two adults (age 28 and 30) would pay Rs 8,099.  The next option is to rely on employer-provided health cover, which insures dependent parents, albeit partly and for co-payment. Many employers allow to take top-up covers for parents on group plans. The employee bears the cost of the top-up. Of course, claims lead to higher premiums on renewal. But a claim made will first be adjusted against the group cover and then against the top-up, if required.  Employees of big companies would pay Rs 6,000-7,000 annually for a Rs 5-lakh top-up cover. This could be higher by Rs 2,000-3,000 for smaller companies. However, you cannot choose a sum assured. It will depend on the deal between the employer and insurer, typically between Rs 2 lakh and Rs 5 lakh.

The biggest advantage of a top-up on group cover is that there isn’t any waiting period, even for pre-existing illnesses. Typically, individual policies have an initial waiting period of 30 to 90 days and pre-existing conditions are covered after two to four years, depending on insurers.  The coverage or features are restrictive in individual plans. A top-up on group cover gives a higher coverage, as group policies cover wider health issues, including maternity and related expenses, pre- and post-hospitalisation and ancillary costs like those on ambulance services.