Here’s how you should buy health insurance for senior citizen parents

Recently, my friend Jaideep’s father was hospitalised for heart-related complications. The eighty-year-old successfully underwent treatment while being in the ICU for 20 days, for which the hospitalisation bill worked out to Rs 7 lakh. To his surprise, while he had taken health insurance for his father, he got reimbursement for only half of the amount. 

Buying a health policy for senior citizens requires a definite approach. Here are essential factors to consider:

Seek adequate coverage.

The usual family-floater policy is not recommended to cover the health expenses of senior citizens as overall premiums get higher. Instead, seek a separate cover for them. Medical costs for critical illnesses, including cardiovascular diseases, cancer, kidney failure and paralysis, are high. Since senior citizens are prone to certain acute conditions, ensure these diseases are covered and with an adequate sum assured. 

It’s an advantage if your parents are covered under a group insurance policy of your employer. It is usually cheaper, has limited waiting periods, and needs no medical underwriting.

However, since it’s linked to your employment, the coverage expires when you change your job. So if you find that the coverage is inadequate, get a top-up. 

Do you need a standard or special cover for your parents?

Standard health plans are comprehensive and can be availed without co-pay and disease-related restrictions. However, most standard insurers ask for a medical checkup before underwriting a policy. As a result, senior citizens with pre-existing diseases do not find it easy to get a cover. Depending on the condition, there is also a waiting period of 2-4 years before hospitalisation expenses are reimbursed. 

Special senior health policies, in turn, are customised for old age requirements and can be renewed till a ripe old age, unlike that of a standard policy. This is especially useful when there is a high risk of developing a chronic ailment. 

Most special senior policies come at a lower premium than standard policies but with the requirement of co-payment. Under co-payment, each time there is a claim, you pay a part of the bill – say 20 or 30% of it. 

Look at affordability.

Buying a policy for a senior citizen does involve a high cost. For instance, the premium for a 60 plus senior citizen will work out to Rs 60,000 a year for a sum assured of Rs 5 lakh in a standard health policy. But then, if you opt for co-pay, the annual premium reduces to 45,000. 

As a thumb rule, go for co-pay only if your parent has any chronic ailment. Moreover, opt for it if affordability is an issue. Later, you could consider switching to a standard cover when finances improve. 

 Look for no caps in room rents.

Room rent capping refers to the maximum cost borne by the insurer for daily hospital rent. It is mentioned in the policy document either as an absolute amount. Sometimes it’s also noted as a percentage of the sum assured. 

One of the reasons Jaideep got a lesser claim was because of this. His Rs 5 lakh health policy had a rent capping of 1% of the sum assured, which worked out to Rs 5,000 a day. And since the hospital charged Rs 8,000 a day for 20 days as ICU room rent, the additional Rs 3,000 went from his pocket for all the days. 

Having no caps on room rents gives the freedom to choose hospitals and the rooms (economy, deluxe, etc.) of your choice while undergoing treatment.

Moreover, since the chances of senior citizens needing long-term care are higher, it is better to look for those without a cap as long as it remains under the total sum assured. 

Don’t ignore other needs.

Most insurers stipulate a waiting period before covering hospital expenses relating to pre-existing diseases. Sometimes, the co-payment is also higher –say 50% compared to treatment for a non-existing disease. So, seek policies that have the least or no waiting period. 

Domiciliary care should also be part of the cover since doctors might prescribe senior care at home for various reasons, including immobility.

Last but not least, consider the location of network hospitals for cashless settlement and if it falls within the convenient vicinities.

Takeaway