Balancing coverage and affordability in senior citizens' health insurance

Combining base policy with super-top-up can also help make premiums manageable

Galaxy Health Insurance has launched Galaxy Privilege, a senior citizen plan that covers pre-existing diseases (PEDs) within a year of purchasing the policy. It also includes rehabilitation, pain management, hospice care, assisted living, and home nursing benefits. Even as health insurance policies for seniors evolve, elders need to carefully select a policy that offers adequate coverage while fitting into their budgets.

 

Challenges for seniors

 

Age-related health risks make purchasing a policy a challenge for senior citizens. Insurers may reject proposals or load premiums heavily after medical tests reveal health issues. Choices tend to become more limited.

 

Policies also become costlier. “As we get older, our health risks increase, and this makes health insurance significantly more expensive for seniors,” says G. Srinivasan, managing director and chief executive officer (MD & CEO), Galaxy Health Insurance.

 

“As the age bracket changes, the premium rate increase can be quite high, raising affordability issues,” says Hari Radhakrishnan, expert, Insurance Brokers Association of India (IBAI).

 

Policies for seniors also come with waiting periods and exclusions. All policies have a 30-day waiting period during which only accidental hospitalisations are covered. “Policies also have specified disease waiting periods for conditions like cataract, hernia, varicose veins and ulcers, which are covered after two years. Congenital external conditions, defects and anomalies are not covered,” says Srinivasan.

 

The waiting period customers should watch out for, especially, is for pre-existing diseases (PEDs), which range from one to three years. 

 

What to look for

 

A solid plan should provide comprehensive coverage at a reasonable cost. Experts suggest at least a ₹10 lakh sum insured with the restore benefit. “Later on, as the person contracts more ailments, the insurance company may not enhance the sum insured,” says Radhakrishnan.

 

When selecting a policy, the focus should be on both premium and coverage. “Many seniors tend to ignore exclusions, waiting periods, disease-wise sub-limits, co-pay clauses, room rent limits, no-claim bonuses, restoration benefits, and AYUSH coverage,” says Anita Upadhyay, CEO, Lord's Mark Insurance Broking Services.

 

Nowadays, add-ons like OPD (out-patient department) coverage and annual health checkups have become available.

 

“Many newer plans now offer home healthcare benefits, such as at-home doctor visits or even ICU setups, which can be helpful to those who may face mobility challenges or prefer recovery at home. It’s wise to look for plans that cover modern treatments like robotic surgeries without restrictive limits," says Siddharth Singhal, head of health insurance, Policybazaar.

 

Radhakrishnan cautions that such features can raise the premium for seniors.

 

Clauses that need scrutiny

 

Room rent: Some policies can have fixed (e.g., ₹4,000/day) or percentage (of sum insured) caps. Those who opt for a higher-grade room face proportionate deductions (actual payout is cost of treatment multiplied by the following ratio: permitted room rent/actual room rent).

 

Disease-wise caps: These restrict claim amounts for specific conditions regardless of the sum insured.

 

Co-pay and deductible: Co-pay means that the insured has to pay a certain percentage of the bill, which could be 10-30 per cent or higher.

 

A deductible is a fixed threshold amount up to which the insured pays. Beyond it, the policy pays. “Prefer deductible over co-pay as it is predictable,” says Upadhyay. With co-pay, the insured’s burden rises as the bill rises.

 

A deductible increases out-of-pocket expenses but also makes the policy more affordable. “Do the cost-benefit analysis of economising on premium versus coverage,” says Radhakrishnan. 

 

Why do senior plans cost more

 

Premiums reflect health risks. “Health insurance premiums for senior citizens have to be higher as they are more prone to falling sick,” says Shilpa Arora, co-founder and chief operating officer, Insurance Samadhan.

 

Upadhyay adds that with age, the likelihood of PEDs increases, which increases the underwriting costs for insurers.

 

Managing high premiums

 

Pairing a base policy with a super top-up can help bring down costs. “Buy a base policy with a sum insured of ₹3 lakh and a super top-up of ₹50 lakh,” says Arora. (The base policy sum insured can be higher, say, ₹5 or ₹10 lakh, while super-top-up coverage can go up to ₹90-95 lakh, depending on affordability.) The former can handle smaller expenses while the latter can take care of major bills. “Super top-up is better than a regular top-up because the threshold is calculated cumulatively across claims in a year,” says Upadhyay. 

 

Singhal offers a few additional tips. “Opting for a preferred network can fetch up to 15 per cent discount. One can also save by downgrading room category and removing non-essential add-ons,” he says.

 

Mistakes to avoid

 

Non-disclosure of PEDs is a common pitfall. “Seniors must declare all PEDs, especially those for which they take medicines or have a history,” says Arora.

 

Buy separate covers for seniors and younger family members. Including both in one policy unnecessarily raises the cost. Arora suggests choosing an insurer whose network hospitals are accessible to be able to avail of cashless settlement. 

Mistakes seniors must avoid 

• Not declaring pre-existing conditions
• Purchasing a family policy that includes younger family members (it raises costs)
• Not checking for clauses in ported policies that restrict coverage of PEDs beyond reasonable waiting periods
• Not checking for low sub-limits on room rent, ICU charges, specific diseases

    The writer is a Mumbai-based independent journalist