Seniors should buy health plans with some co-pay if premium has to be low

Health insurance plans for elderly: They might want to consider critical illness covers, super top-ups and plans that cover homecare treatment among other things

Health Insurance for senior citizens: Keeping in mind the possibility of a third wave of the pandemic, buying health insurance for those who have none is a priority--especially those who are vulnerable, like senior citizens. S P Prakash, managing director, Star Health and Allied Insurance, says, "Health insurance for seniors is now an essential need like food, clothing and shelter, etc. It's no longer a question of whether or not they should have a health plan."

But when choosing a senior citizen plan, many issues need to be considered.

Normal or dedicated plan? 

There are comprehensive insurance plans which can be bought for senior citizens, though some insurers also offer dedicated senior citizen policies. Prakash says, "Individual cover and family floater cover is available up to 65 years. Those over 65 years must consider senior citizen policies." Compared to regular policies, these specific plans are expensive, as the insurer has factored in the age risk. Gurdeep Singh Batra, head–retail underwriting, Bajaj Allianz General Insurance, says, "Standard Plans covering hospitalisation/medical costs for disease or accident should be preferred so as to have a comprehensive cover. Dedicated plans can be additionally bought looking at hereditary illnesses or previous family history of diabetes or cancer, in order to have extra protection."

Some dedicated policies don't even have a medical check-up for buying. If you are a healthy senior, go for a normal policy. But what if you have any health issues? Rishad Manekia, founder and managing director, Kairos Capital says, "It depends on individual to individual; usually a floater is recommended if you're covering several family members. But if someone has a certain specific illness, one can opt for dedicated plans as well. For instance; a diabetic should opt for dedicated plans which cover the ailment."

Should you co-pay or not? 

Simply put, co-pay amount is the percentage of the claimable hospital bill that you will have to pay. Higher the co-pay, the more you will have to shell out of your pocket. Mayank Bathwal, CEO, Aditya Birla Health Insurance, says, "Co-payment provides a win-win situation for both, customers and insurers. Settling for plans for co-payment options is one way of keeping premiums low." Co-payment applies on specified hospital charges, ailments, room rent and surgeries etc. Bathwal adds, "It is advisable for one to opt for waiver of co-payment by paying an additional premium, if possible." If you don't mind shelling out a little more premium to avoid co-pay later, you may consider the same. Manish P Hingar, founder, Fintoo says, Sometimes the minimum share may also go beyond your expected limit. So, it is always advisable to go for a regular, all-inclusive health insurance, instead of a co-pay plan." In short, for senior citizen plans, the percentage of co-payment is 10-30 per cent. Go for plans with a reasonable co-pay amount if you need to keep premiums low.

Should you reduce base cover to replace it with an add-on critical illness rider? 

It is usually a critical illness that burns a bigger hole in the pocket. Hence, many buy defined-benefit critical illness policies. Here a lump sum is paid in the event of diagnosis of listed ailments; this supplements the co-pay ratios or disease-wise capping if any. Naval Goel, founder & CEO, PolicyX.com, says, "Base cover is always essential as it pays for multiple diseases and their related treatments in hospitalisation wherein critical illness riders come alive only when the policyholder is found to be infected with a critical illness." If a person has to pay the bill of Rs 5 lakh and the base cover is merely Rs 3 lakh then the rest of the money will have to be paid by the policyholder. 

Goel says, "The add-on will not come into the play here. However, if a person has sufficient base cover then he/she can pay for the critical illness as well, even in the absence of the rider." In short, health insurance will take care of the insured person’s hospitalisation expenses, an independent critical illness cover will help meet additional expenses triggered due to it. First go for base, then add-on. Bathwal says, "It is a known fact that critical illness expenses are costlier than any other common illnesses. It is advisable to have an independent critical illness cover, as the money payout here is a lump sum on detection of particular illness and not based on actual treatment cost."

Should you go for base cover or super top-up? 

Since senior citizen plans are expensive, to keep premium affordable, many skip the base health insurance cover and try to manage only with super top-up plans. Bathwal says, "A super top-up health plan can be the ultimate backup in case the insured person exhausts the base insurance coverage. The best part is that one can avail this even if he doesn’t have a health policy. Once the deductible is paid, the super top-up policy is activated for subsequent claims." 

With a top-up health insurance plan, you can exceed the threshold limit for your coverage for a single medical claim or hospitalisation per year of the policy. Any further medical expenses or hospitalisation within that year will not be covered under the top up health insurance plan. In super top ups health insurance plans, you can avail this same benefit for multiple medical claims and hospitalisations in a year. Ideally, one should always have an adequate base cover for themselves and their family members. 

Batra adds, "One should opt for a super top-ip cover besides the base cover to ensure wider protection considering the increase in medical costs. "

Amit Chhabra, head-health insurance, Policybazaar.com says, "Go for a high sum insured or if you buy super top up, it should be from the same insurer."

Other important parameters

There are several things to keep in mind while buying a senior health insurance plan. Chhabra says, "Homecare treatments are yet another important aspect to consider when buying health insurance for senior citizens. One should buy a plan that covers hospitalisation at home." 

Annual health check-ups are very important for senior citizens as most of them get themselves tested once every-year. Claim ratio is a ratio of the number of claims paid to customers by the insurance company to the total number of claims. You should purchase health insurance from insurers that have a 90 per cent claim settlement ratio. You can get this information from the insurer's websites. 

Every insurance comes with some exclusions. Read the fine print of the policy to understand exclusions. Check if there are any medical tests needed. Prakash says, "We don't have pre-acceptance screening. You have to fill a self-declaration proposal form." 

Be careful you don't lie in the self-declaration form, as that could lead to claim rejection. Look for policies that allow you a cashless facility and have a network hospital in your home vicinity. Pre-existing diseases (PED) are an important parameter to check. If you are currently suffering from an illness, the policy may either exclude it permanently or cover it only after a waiting period. The waiting period is usually 2-4 years. Look for a policy where the PED wait period is lower. Go for policies that have a one-year waiting period for senior citizens.

Table: Health insurance premiums payable by a 60-year-old male for Rs 10 lakh sum insured

Senior Citizen Health Insurance Plans
Insurer	Plan	Annual Premium (Rs)
Star Health and Allied Insurance	Senior Citizen Red Carpet	26,550
Aditya Birla Health Insurance	Activ Care Standard	24,202
Care Health Insurance	Care Senior	25,828
Comprehensive Health Insurance Plans
Insurer	Plan	Annual Premium (Rs)
Care Health Insurance	Care	25,265
Star Health and Allied Insurance	Star Comprehensive	30,881
Aditya Birla Health Insurance	Activ Health Platinum Enhanced	31,927
Bajaj Allianz General Insurance	Indidvidual Health Guard	39,884

Source: Policybazaar