Introduction:
A majority of households in the country often overlook health insurance. Even families with active life insurance policies for the family head refuse to acknowledge the importance of taking health insurance. The rapidly changing lifestyle of people tags along diseases like obesity, heart disease, diabetes and stroke. This, in turn, has made hospitalization, treatment and medical expenses an inevitable part of most people’s lives. Along with the massive increase in the number of people diagnosed with such diseases, healthcare costs also multiply. This, coupled with the vulnerability of elderly parents, takes both emotional and financial toll on the entire family. Health coverage for senior citizens lets the family breathe easily during the crisis by easing financial concerns and allowing them to look after their ailing parents.
Health insurance for senior citizens in India:
Health insurance for senior citizens is a specially designed insurance plan to address the healthcare needs and medical expenses of individuals aged above 60 years. It helps them cover medical treatment and hospitalization costs at the hospital of their choice. It offers numerous benefits like pre-existing disease coverage, cashless hospitalization coverage, pre and post-hospitalization coverage, preventive health check-ups and tax benefits. The insurance is a safety net that offers financial support when needed, thereby reducing the anxiety and economic concerns of the ailing person and their family.
Since numerous health insurance policies are offered by about two dozen insurance companies for senior citizens in the country, it has become vital to look for a coverage plan that caters to the various needs of the individual. Below are some of the secrets one must be aware of before choosing a health insurance policy for senior citizens.
1. Claim settlement ratio:
The claim settlement ratio (CSR) is the ratio of claims settled successfully by the insurance company against the total number of claims that they have received. The factor not only tells policy seekers about the financial capacity of the insurer to pay claims but also gives an insight into their consistency level in settling claims. Since a high claim settlement ratio indicates the insurer’s commitment to settle claims, it always plays a vital role in choosing the policies.
The Insurance Regulatory and Development Authority (IRDA), a statutory body constituted to regulate and license insurance industries in the country, releases quarterly reports detailing claims settled by each insurance company. CSR is believed to be fair if it falls between 75% and 90%, though a higher ratio is better for the policyholders.
2. Incurred claim ratio:
The incurred claim ratio (ICR) is the total amount of money paid by the company as claims against the total premium collected from policyholders. It helps policy seekers understand the insurance company’s financial stability and reflects its long-term financial credibility. The ratio can be viewed as the company’s ability to pay equal importance to policyholders’ and their financial well-being. Just like CSR, it is also published by IRDA in its report. ICR is believed to be ideal if it falls between 50% and 100%.
3. No-claim bonus:
Abbreviated as NCB, it is a remunerative benefit the insurance company offers to police holders for a claim-free year. It is one of the significant factors to consider while choosing a policy since it provides a monetary benefit for every no-claim year, which will help increase policyholders’ insured amount. The insurer can either offer a cumulative bonus – under which policy holders’ insured amount will increase by a certain percentage – or a discount on premiums – under which the premium rate of policies will come down by a certain percentage.
4. Pre-existing disease coverage:
Pre-existing disease (PED) is a medical condition the policyholder has before purchasing a policy. As per the guidelines issued by IRDAI, a policyholder is said to have PED if they were diagnosed with a medical condition up to 48 months before purchasing the policy, and it includes any long-term condition right from high blood pressure and diabetes to thyroid and asthma. Since most of the policies cover PEDs only after a waiting period and no claims raised for PED treatment will be approved during the waiting period, it is wiser to purchase a policy with a minimum waiting period. On average, the PED waiting period is between two and four years, but it varies from one company to another.
5. Extensive network hospitals and cashless hospitalization:
Since senior citizens are vulnerable to diseases and may require frequent hospitalization, it is always better to purchase health insurance covering many network hospitals. It will be more convenient for policyholders to find a hospital nearby if the list of network hospitals included in the policy is longer.
In network hospitalization, a policyholder can get treatment in one of the hospitals included in the insurance company’s network and avail of cashless Mediclaim without submitting any bills or documents and without any waiting period. The company will bear the expenses covered under the policy. If treated at a non-network hospitalization, the policyholder must pay the hospital bill and claim the amount by submitting the documents and invoices. It usually takes a couple of weeks to get the refund amount.
6. Co-payment:
Co-payment, which is nothing but a fixed sum in the claim that the policyholder agrees to pay irrespective of the claim amount, is insisted in most of the health insurance policies for senior citizens. While the policyholder pays the co-payment amount, the insurance company pays the remaining amount. In most cases, it varies from 10% to 30%. Most policyholders prefer to purchase a policy with either no co-payment or less co-payment because a higher co-payment kills the purpose of buying the insurance policy. So, it is vital to check the clauses of the policy before purchasing one.
7. Lifetime renewal:
Since most health insurance policies have an age limit for renewal, choosing a policy with lifetime renewability is wiser. It means a policyholder can renew their coverage without re-qualifying for a new policy. With this policy, a policyholder, especially a senior citizen, need not worry about spending from their pocket for treatment. Since it does not have an age limit, one can continue receiving health insurance coverage for life, and there is no waiting period for PEDs.
8. Tax benefits:
As per the section 80D of the Income Tax Act, 1961, a senior citizen or those who are paying for health insurance for senior citizens can avail of health insurance tax benefits. It offers tax deductions on insurance premiums up to Rs 50,000 in a financial year for senior citizens. If you are someone who is aged above 60 years and you have claimed health insurance policies both for yourself and your parents, then claims can be made up to Rs 1 lakh in a financial year. However, deductions under the section cannot be claimed if the company made a group health insurance premium on behalf of the employee.
9. Critical illness plans:
It has become essential to avail of a critical illness plan even if a person already has a health insurance policy. It provides extensive coverage against life-threatening conditions like cancer, kidney failure and heart attack. Apart from easing the financial concern during the emergency by covering medical expenses, the plan also ensures that their livelihood is not put at stake by compensating for the lost income.
10. Policy with AYUSH cover:
Due to the rise in number of people opting for AYUSH (Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy), an alternative medical treatment, IRDAI has gone a step ahead and modified its guidelines to let insurance companies to cover AYUSH treatment. As a result, health insurance companies have started covering the expenses incurred for the treatment.
