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Friday, Jun 30, 2017

Senior citizen health insurance plans are restrictive. Read on to find out how

[Source : The Economic Times]

The cost of healthcare in India is increasing at 20 percent every year, which is more than double that of overall inflation.

The need for adequate health cover, therefore, attains importance not just during the working life of an individual but even after one retires. Hospital bills could be a shock unless you have an insurance to back it up.

With longer life spans, unless one is in pink of health, the need for insurance is also rising. Life expectancy which today stands at 71 years is up from 53 years almost two decades ago.

Interestingly, the life expectancy at age 60 (by when most of us retire) is higher at 77.2 for men and 78.6 for women. With technological advances, expect to live longer and therefore, plan for adequate health cover in advance.

Senior citizen health insurance 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.

Premium and age band

The premium of a senior citizens health insurance plan would typically depend on the age of the individual. The premium, therefore, for most companies would be same for ages falling under a certain band. As an exception, in the case of Star Health insurance, the premium is the same for all ages between 60 and 75 and is only based on the sum insured.

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 but is not uniform across the industry," informs M. Ravichandran, President, TATA AIG General Insurance Company.


Existing policyholders need not switch

If one has already bought a health insurance plan anytime before age 60 or 65, it is better to continue with it. Senior citizen health insurance plan, in that case, is not required to be purchased.

Individual or family floater health plan allows one to buy them till age 65, and have lifetime renewability. As per the IRDAI guidelines, the policyholder may continue renewing it for a lifetime. Continuing the same plan also helps as one gets eligible for the benefits of the waiting periods and for pre- existing ailments.

Opt for a regular plan and choose the senior citizen plan only when age is not on your side and one is not eligible for buying a regular plan. Ravichandran says, "The coverage under senior citizen plans is generally more restrictive compared to regular plans offered by insurers. It is better for the customer to continue a regular plan rather than switch. The senior citizen plans are intended for people who are buying insurance for the first time at an older age and they might not be eligible for regular plans."


RESTRICTIONS ABOUND

Exclusive senior citizen health insurance plans may be highly restrictive in terms of features. Here's what such plans may have to offer. Read on to avoid any surprises later on.

Co-payment

Co-payment is typically a mandatory feature in all senior citizens health insurance plans. When the hospital bill comes, the insured has to share a portion of it i.e. make a co-payment.

Co-payment will be applicable primarily on three things - Specified ailments, specified hospital charges and treatment hospital. For example, copayment could be applicable on room rent and specific illness and surgeries including day care surgeries. In some plans, there could be 20 percent co-payment, if the treatment is taken in a hospital other than a network hospital

In some plans, the insured has to bear 20 percent of admissible claim amount in each and every claim. 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. Ask the insurer for the waiver of copayment on payment of additional premium, if possible. "A reasonable co-payment itself is not an issue they should look out for low disease or procedure limits which do not serve them in a claim situation," informs Ravichandran.

Sub-limits on hospital expenses

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 1 per cent of sum insured and hence for a policy of Rs 3 lakh, room rent would be restricted to Rs 3,000. So, have a close look at the sub-limits and be prepared to pay out-of-pocket expenses.

Waiting period

More than anyone 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 four claim-free years.

In addition to general waiting periods, the senior citizen health insurance plan might also have a cap on the claim amount for certain treatments. For example, a plan could limit the expense on cataract treatment to only Rs 20,000 even if the policy bought is for Rs 4 lakh. Similarly, there could be a cap on the treatment of cardiovascular diseases or renal complication up to Rs 2.25 lakh. Being aware of these may help in a better claim experience.

Pre-existing conditions

Coverage of pre-existing ailments is an important element in health insurance plans especially in the case of senior citizens. Get clarity on their coverage - by when will they be covered and up till what amount - from the insurer while buying them. Few companies allow coverage of pre-existing conditions after 24 or 36 months but may pay up only 50 percent of the claim in case of any such condition. In some plans, the pre-existing conditions like hypertension, diabetes and its complications are covered after 18 months of continuous insurance but only on payment of additional premium.

Cost of medical test

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.

Additional features

In addition to the above features, which one should not overlook, there could be additional features in these plans. They may not be priced separately still it's better to weigh the importance of them in your schemes of things and then decide accordingly. Not all could be important and could bring in only fringe benefits.

* Enrol one's spouse and one may get a discount on the premium. Most insurers provide a family discount of 5% on the total premium if the policy is taken for self and spouse.

* Some senior citizens health insurance plan offers domiciliary treatment when the treatment expenses involved in getting a treatment done at home which otherwise would need hospitalisation would be covered.

* Few plans could allow treatment expenses for the organ donor at the time of organ transplant.

* Additionally, most plans cover ambulance service expenses up to Rs. 2000.

* Some plans will allow e-opinion, usually a second opinion from a medical practitioner per policy year.

* If there are no claims made, usually at the end of 3 years, some policies allow a free medical check-up equal to an amount of up to 1 percent of the sum insured.

* Also, not all senior citizens health insurance plan will cover the OPD expenses. The ones that cover may limit it to say Rs 200 per consultation or Rs 8,000 in a year.

Read the exclusions carefully

It is critical to read the fine print carefully so that you're not in for disappointments. Check 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.

Watch outs

While selecting, ensure that specific diseases or medical conditions that you or your family members are more prone to, based on family history, are at least covered. Do not look at the extent and terms of coverage in isolation but keep an eye on the premium as well. A low premium policy might have several exclusions or could be highly restrictive in features. Evaluate 3-4 plans based on the features as above to zero- in. And most importantly, disclose all your pre-existing ailments for a smoother claim management, as non- disclosures may lead to a repudiation of a claim.

Conclusion

Senior citizen health insurance plans are meant exclusively for those who are aged 60 years or more at the time of buying insurance. The features and the nature of such plans could be restrictive in nature. Therefore, someone who is not eligible to purchase a regular health insurance plan, because of age limits, should only consider them. And once bought, keep renewing each year without fail.

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