Health Insurance insurance is a must-have for all considering the rate at which medical costs are rising, almost 12-15 per cent every year. Therefore, it is critical to have an adequate health cover, and it is even more important for senior citizens. The absence of health insurance can wipe out your entire savings in a single incident!
Apart from that, your parents deserve a healthy and peaceful life in their golden years.
Keeping their need to be adequately covered as well as remaining self-reliant and lead a life of dignity, we at Prabhudas Lilladher offer insurance policies so that your parents can have the best medical treatment and financial backup when they need it the most.
What are Senior Citizen Plans
Senior citizen health insurance plans are exclusively for seniors who look to meet high medical costs during hospitalisation by paying a premium each year to the insurer who pays the sum insured in case of medical treatment.
IRDAI mandates the entry age for the health insurance plans and has also made the renewability till lifetime as a compulsory feature in all plans. By regulation, all health products must allow members up to a minimum of 65 years of age. Senior citizen plans generally accept higher age groups upto 90 in some cases.
One should of course choose the senior citizen plan only when age is not on one’s side and one is not eligible for buying a regular plan as the earlier plans, if renewed means a lot of additional benefits. So if your parents discontinued their health plan after 65, and cannot therefore go for renewals, these plans come into picture as the desired avenue.
Typical Terms of a Senior Citizen Plan
Remember- Premium is not the most important thing in insurance especially here. Other factors to keep in mind while opting for a senior citizen insurance would be, and this is where Prabhudas Lilladher expertise will come into play:
- Cover and Sublimits: The amount of cover made available to the insured is one key factor – typically the insurance premium will be between 5%-10% of sum assured for senior citizens between 65- 90 years of age. Sub-limits refer to the extent, usually a percentage of the sum insured, to which the insurance company will pay the claim for different hospital expenses. Doctors’ fees, surgery/operation charges, nursing expense, medicine cost and room rent, can have a specific cap called the sub-limit. In a plan with a sub-limit, irrespective of the sum insured in the policy, the claim for any expense is restricted to the sub-limit for that expense. For example, room rent could be capped at 0.5% per cent of sum insured and hence for a policy of Rs 1 lakh, room rent would be restricted to Rs 500. So, have a close look at the sub-limits and be prepared to pay out-of-pocket expenses.
- Co-Payments: Co-payment is typically a mandatory feature in all senior citizens health insurance plans. Co-payments mean that a pre-defined percentage of the amount of claim will be borne by the policyholder and the remaining sum will be settled by the insurer, a usual clause with many group health insurance. When the hospital bill comes, the insured has to share a portion of it i.e. make a co-payment.The lower this % the better it is, of course. Co-payment will be applicable primarily on three things – Specified ailments, specified hospital charges and treatment hospital. Over and above that, one may opt for a higher co-pay to further lower the premium. Before buying, get clarity on the applicability of co-payment.
- Maximum Age to Renew: A lot of insurance companies offer mediclaim policy for your elderly parents falling in the age bracket between 60 to 80 years; however, a few companies restrict the age of the policyholder to 69 years of age. only. So, after you celebrate your 69th birthday, it will be harder for you to buy a health insurance plan for yourself. The limits of age for renewal differ from insurer to insurer. Generally, it is 90 years.
- Coverage of Diseases/ Waiting Period: If a senior citizen is suffering from any of the pre-existing illness, the disease will be covered by the insurance company typically only after the completion of a period of 24 months. There are a few companies that do not cover these pre-existing illnesses at all!
More than anything else, senior citizens should be very careful with the waiting periods in the policy. No diseases get covered during the first 30 days from the commencement of any policy and only the accidental hospitalisation gets coverage from day one. Further, some diseases are covered only after the expiry of a specified period. There are 1-year, 2-year, 3-year and 4-year exclusions for certain diseases. Pre-existing illnesses are mostly covered after the expiry of 3 claim-free years.
- Freelook Period: A free look period is the time duration where the policy holder is allowed to terminate their insurance contract, if they do not agree with the terms and conditions of the policy or do not wish to proceed with the intended policy, without being penalized with surrender charges. Policy holders can exercise this option within 15 days of receiving the policy documents though some insurers may extend this period with a lower refund amount.
Being a health insurance plan for senior citizens, insurers would insist for a medical check-up and make them undergo certain medical tests. Most insurers do not charge or reimburse the fees for such tests especially when done in their empanelled hospitals. Get clarity on the costs while selecting. Importantly, insist on medical tests even if the insurer is not asking for it. It helps in better claim processing and avoids undue hassles later on.
Most insurers provide a family discount of 5% on the total premium if the policy is taken for self and spouse. Check also which hospitals are there in your neighbourhood that are on the list of cashless hospitalisation facilities. In the non- network hospitals, one may have to make the payment first and then claim the reimbursement.
Tax Benefits
Besides medical coverage, health insurance plans can provide Tax benefits to you. The premium paid towards medical insurance is tax deductible under section 80D of the Income Tax Act, 1961.
You can claim tax deductions, provided you are paying the premium on a mediclaim policy which is in the name of
- Yourself (and / or)
- Your Spouse (and / or)
- Your Parents (Parents need not be dependent on you) (and / or)
- Dependent Children
Under Section 80D an assessee, being an individual or a Hindu undivided family, can claim a deduction in respect of payments towards annual premium on health insurance policy, or preventive health check-up / medical expenditure in respect of Senior citizen (above 60 years of age). Even individuals who pay premiums for their dependent senior citizens parents can claim the additional deduction on health insurance premium (or) medical expenditure
You are eligible for an income tax rebate of Rs. 50,000 if you hold a mediclaim policy for senior citizens for your elderly parents. You can also avail am additional rebate of Rs. 5,000 for preventive health checkups annually.
Connect with Us
With a team of experts, we at Prabhudas Lilladher can enable you with a quick and easy comparison of available health insurance policies and thus, help in saving your time and money.
Just connect with us at https://www.plindia.com/healthinsurance/ and leave your details so our personnel can be in touch with you and advise you on how you can help your parents achieve independence from worries!