The on-set of old age is akin to a second childhood, and it is common for grown-up children to be actively involved in looking after their parents during this phase.
Doesn't this scenario ring a bell? Don't you find yourself to be the primary caregiver of your parents?
If the answer to the question is yes, then you can start by buying a suitable health care insurance plan for them rather than relying on a group insurance scheme.
Here are some scenarios that you must consider before persisting with the current group cover.
Small-Sum Insured Size, Group Cover is simply not enough!
No doubt, the health insurance coverage offered to your parents under your employers' group scheme is a great way to keep your parents insured, but it may not be enough.
With the healthcare inflation rising at 12-18% per annum, the group cover offering coverage in the range of Rs. 3-5 lakh does not necessarily solve the purpose and when the time for reckoning comes, you might have to dig into your rainy day savings to bridge the gap.
Besides, there is always a lurking prospect that your employer may not continue to cover your parents under the company's group medical policy in future to reign in burgeoning costs.
The need of the hour is to offset the possibility of leaving your parents without continued health cover by purchasing an independent senior citizens health plan for them with a minimum sum insured size of Rs.5 lakhs.
Change in employment
If you are working in the private sector, the likelihood of changing your workplace is always a possibility.
While your previous employer may have included your parents in the group cover, it is probable that the new organisation may not be as welcoming.
The question you need to ask is why your parents should be subjected to the whims and fancies of decision you take and the HR practices of your new employer?
The changing landscape of group insurance
Global downturn and pressure on sustaining bottom line on the back of a sluggish economy have led to a drastic decline in the number of organisations including parents in the group cover.
Adding fuel to the fire is a recent report by Marsh Insurance Brokers clearly stating that only 36% of the organizations prefer covering dependent parents under employee group medical policies.
The number of existing organisations, which include parents in the group cover has dropped from 65% to 54% and continues to reduce further.
If your organisation follows this philosophy your parents will be left without any healthcare protection and with an increase in their age, your options to buy a product offering optimum protection will narrow down.
A sensible way to ensuring quality healthcare!
The logical question to ask yourself is if it is worth taking a chance and relying on your group cover entirely, especially when the terms and conditions of group cover can be changed anytime and you do not have a say in those decisions.
Considering the given scenario, buying an individual cover for your elderly parents is simply a sensible thing to do. In the event of your parents falling ill and requiring a hospitalization or god forbid a procedure, the major part of the medical expenses will be taken care of by your parents' health cover plan, without burning a hole in your pocket and more importantly not compromise the quality of treatment. The same cannot be stated for a group healthcare plan.
Therefore, the question that you must ask yourself is if giving them an independent health care option with total ownership of the insurance product more logical and befitting?
Pre-existing Disease May or May Not be covered in your group plan but on retail policies, coverage shall certainly exist after waiting period.
Industry experts suggest going for independent policy rather than group policy as a group cover does not always includes pre-existing diseases.
However, in an independent senior citizens policy, most of the pre-existing diseases get covered after a specific time period and once covered future claims are a certainty.
However, group insurance cover is not a certain proposition because every year the renewable terms and conditions can be altered.
For example, Star Health's Red Carpet Plan has a waiting period of only one year to cover pre-existing diseases (PED).
This is considerably lower than regular health policies, which have a pre-existing waiting time that can go up to as much as four years.
Product Innovation has led to the widening of options
In today's day and age insurers do not follow one size fits all approach. They realise the need to introduce new innovative products, which fulfils the premise of purchasing insurance.
The key highlight in most senior citizen medical cover is the shorter waiting period of one to two years for the pre-existing illnesses.
Now you have products, which cover common PEDs (pre-existing diseases).
For Instance, if either of your parents suffers from diabetes, you may want to consider purchasing Religare Health Insurance's Freedom Care Plan, which covers PEDs after two years of purchasing the product.
Another option to consider for your parents is the newly launched Go Active plan by Max Bupa.
In addition to offering worldwide emergency cover and protection against PEDs after three years, with no co-pay burden on the policyholder, it allows claiming expenses on treatment undertaken at home.
Never hit the wall
Before you buy a product for your parents, make sure to check the claim settlement ratio of the insurer as well as the time taken to settle the claims.
It is also advised to go through the product brochure and focus on understanding the exclusions of the product. However, if you haven't bought an individual health coverage for your parents, you better get one as soon as possible.
Remember, the earlier you buy a medical cover for your parents, the more will be the benefits on offer and at a lower price.
Benefits and Costs:
While tax deductions should never be the primary reason for buying an insurance product, it is noteworthy to mention that according to the provisions of budget 2018-19, you can claim a tax deduction up to Rs.50,00 Under section 80D, if you pay the health insurance premium of your parents.
Here is a table indicating the premium of policy with Rs.5 lakh sum insured sold online and insurance benefits for parents (Father & Mother) who are 61 years old.
Benefits of Insurance:
Vaidyanathan Ramani, is Head for Product and Innovation at Policybazaar.com.