Opt for deductible to reduce premium, ensure sub-limits are reasonable

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Health insurance plans for senior citizens are becoming popular. According to data from Policybazaar.com, 25 per cent of all the health plans sold on their platform are now purchased for senior citizens. About 35 per cent of these purchases are by children for their parents. Among their non-resident Indian customers, 60 per cent purchase health insurance plans for their parents in India.

Two categories of plans are available. The first is the standard health cover, which is open to all age groups, including seniors, now that the regulator has got insurers to remove any upper age limit for entry. The second is plans designed specifically for seniors.

Easier access to coverage

The main benefit of a senior citizen plan is witnessed at the time of issuance. “Many seniors already have PEDs. These policies are designed to be issued even to those with a medical condition,” says Kapil Mehta, co-founder, SecureNow.

According to Ashish Yadav, head of products and operations, ManipalCigna Health Insurance, “Their key feature is comprehensive coverage for medical expenses, including PEDs, from the 91st day onwards.”

Siddharth Singhal, business head-health insurance, Policybazaar.com, says in many policies the waiting period can be reduced to day one by paying about 20-odd per cent extra premium.

These plans also allow seniors to manage the premium cost by offering features like deductible and copayment. “Earlier, copayment was mandatory in a senior citizens plan but is optional now,” says Singhal.

Many of these plans offer home hospitalisation cover. Some offer OPD (outpatient department) and mental health consultations, especially relevant for seniors.

Yadav informs that many plans offer higher sum insured options to shield the elderly from rising medical inflation, guaranteed bonus to provide a financial incentive, and preventive care services. These plans also offer lifetime renewability and Section 80D tax deduction.

“Senior citizen plans are not specifically costlier than normal health insurance plans,” says Singhal.

But premiums do go up with age. “This is due to the higher risk associated with insuring older individuals. The cost difference can vary on factors like the insurer, sum insured, specific benefits offered, other coverage options included in the plan, and health status of the insured,” says Ajay Shah, head–distribution, Care Health Insurance.

Managing the premium

One way seniors can manage the high premiums at their age is by opting for a deductible. “If you agree to pay hospital bills of up to, say, Rs 25,000, you could get a 15-25 per cent discount on the premium,” says Singhal. He suggests opting for a deductible rather than a copayment as in the former, the money a customer has to pay from his pocket is capped at a specific amount. In copayment, the customer’s liability increases with the size of her bill. Singhal recommends a deductible between Rs 25,000 and Rs 50,000. Premium can also be reduced by opting for a lower room rent category.

Buy adequate sum insured

Purchase a sum insured of at least Rs 15 lakh for each senior citizen. “One reason is high medical inflation of 14-15 per cent. The bigger risk is that later, based on your claim history, the insurer may not agree to hike the sum insured at renewal,” says Singhal.

When selecting a plan, give maximum weight to the waiting period for PEDs. “The shorter it is, the better,” says Mehta.

Senior citizen plans tend to have sub-limits. “There could be a cap for specific ailments such as cataract, knee or joint replacement, or for modern treatments. Make sure the caps are sensible,” says Mehta.

Shah suggests ensuring that the insurer has a wide network of cashless healthcare providers, especially close to your house.

Compare the claim settlement ratios and premium rates of prospective insurers. However, do not go for the cheapest plan. “Assess the coverage benefits, sum insured, network hospitals, etc. also instead of just the premium,” says Shah