In a recent draft guideline, the Insurance Regulatory and Development Authority has asked insurers to extend the entry age for health insurance to 65 years. While this is a good move, today, very few insurers allow senior citizens to buy health covers as there is no entry age norm.
According to data provided by industry players, eight of the 23 general insurance companies provide health insurance covers to those above 60. Of these, most allow renewals for a lifetime.
The hitch: While purchasing a health insurance policy, those above 60 have to pay a higher premium as the age versus health risk metrics are higher. As your age increases, the risk exposure of insurance companies also rises and to maintain a balance, these firms insert some built-in buffers in the form of higher charge.
But experts say these should not serve as deterrents for senior citizens shopping for health plans. Sixty-two-year-old Subhash Gogna and his wife Sushma, are looking to buy a health insurance plan. Gogna has been in good health all life and, hence, never felt the necessity to buy a cover for himself and his wife. His employer's cover helped matters as well. But, today, he feels the need for health insurance safety. He has no cover as of now. The couple does not have children; otherwise, Gogna says, he would have opted to be covered under their employer-provided group cover.
Says Akshay Mehrotra of policybazaar.com, "We suggest the husband and wife should be covered individually. As taking them under a floater plan will hamper their individual medical needs."
If Gogna takes a Rs 5 lakh cover each for himself and his wife, they will have a separate sum assured for themselves. Whereas, in a family floater plan, they might eat into each others cover as there is no limit on how much each one can use. While Gogna would have to pay Rs 19,854 (Star Health's Red Carpet) for a Rs 5 lakh cover, his wife will have to pay Rs 15,686 (Star Health Medi Classic). The total would be Rs 35,540 annually (with Bajaj Allianz's Individual Health Guard). Had Gogna's wife been over 60, the total would have been over Rs 40,000.
Mahavir Chopra of medimanage.com has a different suggestion. "They could buy a family floater plan, but for a very higher sum assured, that is, not less than Rs 8 lakh." For a Rs 7.50 lakh cover for Gogna and his wife, Max Bupa's Heartbeat Gold will charge Rs 63,324 annually, much higher than individual plans.
However, typically, it is said those in the higher age bracket should take individual cover of a minimum of Rs 5 lakh and a younger family could go for a family floater plan, that is, where the policy proposer is young (up to 40 years) as the premium is decided based on the family proposer's age.
Another problem is the co-payment clause that many of these policies have. For instance, Max Bupa asks for sharing 20 per cent of the claim for those above 65 and National Insurance asks for 20 per cent for pre-existing diseases and 10 per cent for other claims. Similarly, pay attention to room and ICU rent restrictions such as National Insurance and Star Health apply a one and two per cent restriction, respectively.
|TAKE A PICK|
|Company||Apollo Munich||Bajaj Allianz General||ICICI Lombard||Max Bupa||National Insurance||Star Health|
|Silver Health||Complete||Gold||Varishta||Red Carpet|
|Entry age (years)||65||70||Any age||Any age||80||74|
|Sum insured (Rs lakh)||3, 5, 10, 15||1-5||1-50||1-50||1 (Mediclaim), 2 (critical illness)||1-5|
|Maximum renewal age (years)||Lifetime||75||Lifetime||Lifetime||Lifetime||Lifetime|
|Waiting period for pre-existing disease (years)||3||1||4-Feb||4||1||From 2nd year at 50 per cent co-payment|
|Co-payment||No||No||No||20 per cent after 65 years||20 per cent for covered pre-existing diseases and 10 per cent for all other claims||30 per cent for all claims other than pre-existing|
|For a couple above 60: Buy separate cover of at least Rs 5 lakh each; premium could start from Rs 15,000 |
Senior citizen(s) with independent children: Ideally should buy an individual cover for those above 60 and a family floater for the others as the premium is decided on the family proposer's age. Or, the children could opt to cover the senior member of the family
Senior citizen(s) with dependents: There are no options to cover dependents. There are even slimmer chances of covering the senior citizen's parents. Their siblings can be covered, but at a very high premium. Differently-abled children are not covered by insurers, and if they are above 21, they are not considered children
If either of his sons were looking to buy a health plan, A S Sharma could ask them to become the family proposer and save on high premium. Sharma also wants to buy a health cover. He will hang his boots in November when he turns 65 and his employer provided health plan will cease to exist. Sharma lives alone, has diabetes and high blood pressure. His two sons and their families are settled abroad. He would have preferred to get covered under his sons' group health cover but they do not have any such facility.
Sharma could do well with an individual cover for himself (Rs 5 lakh).
Chopra explains, "Individual cover is suited when you are not in immediate need of it as most insure pre-existing diseases after two-four years but will stay with you for life. This is unlike a group cover, which is best if needed immediately, but depends on your exit from the company. At the same time, the more you delay buying an individual cover, the more you are likely to pay."
For those who have a medical history, he suggests, be covered under a group plan, but buy a sufficient separate cover. Those in good health could be covered under a group plan, but also have a small (Rs 2-3 lakh) separate cover.
Luckily, Sharma and Gogna don't have dependents. But, there may be some who have either a differently-abled or unemployed child or their parents or siblings. There is no option for them.
"Differently-abled persons are not covered under health policies, not even under a floater plan. And for a majority of insurers, once a person attains the age of 21, he or she cannot be counted as a child. Thus, they need to have a policy of their own," says Mehrotra. Bajaj Allianz's Individual Health Guard would cost someone between 26 and 40 years Rs 3,283 for a Rs 2 lakh cover.