Picking the Right Health Insurance Plan for Your Parents
Have you ever been worried about the thought of getting old? The thought that you might not have the same health anymore is scary enough. Then multiply it with greater chances of getting diseases or having an ever-ailing body part, and this might scare you to hell. Now look back and you would realize that this is the same stuff that your parents are suffering right now.
It is true that today in this dynamic world, we probably don’t get enough time to spend with our parents. But the bare minimum we all can do is to take care of all their medical problems, or say have it all covered.
Luckily, we have health insurance plans which are custom designed for our parents. But, this is not the end of the problem, but it may well be the beginning of another one—the Problem of Choice. With so many insurance policies flooding the markets with different features, it may not be the most straightforward choices that you would have to make to get the perfect insurance plan for your parents.
There are several parameters that you should keep in mind when you decide on the ideal plan for your parents.
- Check the Age Limit
The IRDAI now mandates that entry must be allowed till the age of 65 years or less, but you should still check the maximum age at which the insurance is allowed for your parents. Most companies will not allow you to enter into health insurance agreement if you are more than 70 years old. But, why wait so long to take health insurance. As a Golden Rule, it is always better to try to buy health insurance at a younger age and keep renewing it in the future.
This is because, in this way, you need to pay lower premiums, and also you get coverage of a more significant number of diseases that are sometimes not covered if you grow too old. Also, when you check this, make sure you look at the contract about the maximum age of renewability. Some insurance plans may not allow for lifetime renewal, so it’s essential to understand the terms of the agreement.
- Comprehensive Coverage
It is essential to check the insurance contract as to what kind of health check-ups you are getting coverage for. At an advanced stage, there may be a routine consultation, check-ups, tests that involve doctor consultation costs. These are called Pre-Hospitalization Expenses. It needs to be checked whether the insurance policy covers these kinds of health expenses in its benefits or not.
Also, few health insurance policies require you to at least spend 24 hours in the Hospital; this could be troublesome as with more superior technologies many advanced and expensive treatments don’t involve the patient to wait for 24 hours in the Hospital. Check for these too, before taking the plan.
- Sum Assured
The higher sum assured is directly proportional to higher premiums. It is considered as a direct trade-off; however, it is not recommended that you go for a lower premium at the expense of a higher coverage in the case of senior citizens’ health insurance plans. This is because, at older ages, the number of medical problems can stretch for a prolonged period and you are always prone to debilitating diseases. This usually turns out to be a costly affair.
Also, individual insurance companies offer you more than the usual pre-hospitalization and post-hospitalization expenses. They offer you a consumable allowance, allowance for a companion, dialysis cover, and so on. Make sure you get the best value for your money.
- Co-Payment options
Health Insurance plans for your parents may not involve full payment of Health Billables by the Insurance Company. They may also require you to mandatorily pay a fixed amount or a certain proportion of the entire billable amount.
Naturally, the premium is lower in such cases as the effective coverage is lesser. It would be a suggestion to evaluate the situation correctly; getting more co-payment may not be the best option for a lower premium, if in case of a claim you are paying the maximum amount out of your pocket.
- Pre-Existing Illness Clause
Many insurance companies look at the pre-existing diseases or illnesses in a very different way. Pre-existing coverage generally comes with a waiting period clause. The problem arises if the patient needs hospitalization to cover for that specific disease.
The insurance companies would refuse that altogether. The lower the waiting period; the better is the insurance proposition. Look for maximum coverage of pre-existing diseases with the lowest waiting period.
- Type of Policy: Single versus Floater
Apart from how to choose the plan for your parents, it is crucial to determine precisely what kind of plan you should be targeting for them, or say collectively as a family. Should it be individual insurance for every member or should it be a family floater plan with joint premium and joint coverage for every member?
It is highly recommended that the family should opt for Individual Insurance rather than a family floater for the old parents because of two significant reasons. The first reason is the Higher Coverage. As mentioned before, in old age, higher coverage is preferred in the Premium Coverage Trade-off. Individual Insurance gives higher coverage than a Family Floater Plan so that it might be better for your aging parents.
The second factor is the premium. In a family floater plan, the premium is calculated as per the age of the senior-most member in the plan. In the case of an old parent, this amount tends to be pretty hefty.
- Insurance Claim Process
Every company must make a public disclosure about the claim settlement ratio on its website. When you are choosing a company for different insurance plans, the settlement ratio plays a huge role. A company with a higher claim settlement ratio should be preferred over a lower one, as it gives increased confidence to the senior citizen purchasing the insurance.
One other handy factor may be to look at the claim settlement process of companies. Some companies bury you in paperwork and take a lot of time for the claim to be settled. Make sure that you make an informed choice, as to be wary of these companies.
- Network hospitals
This is a minor point which can be missed by a lot of you before buying insurance. Some insurance plans are limited to claims only in certain hospitals or only in certain cities. Make sure for your parents you take an insurance policy which covers a wide range of hospitals specializing in a range of treatments and present in the towns near your place of residence.
Last but not least, make sure that you are aware of the Tax Deduction that you can claim under Section 80D for senior citizens’ health insurance. This has a maximum limit of Rs.50,000 per year. This is over and above the deduction of Rs.25,000 that you can get for non-senior citizens.
We have discussed several factors that need to be taken care of before opting for any particular insurance plan. It would not be an easy decision, but one which you should take and preferably at an early age.
FAQs: Choose the Right Insurance Plan for Your Parents
What is the Tax Deduction under Section 80D?
If the Mediclaim premium is paid for self, spouse, or dependent children, a maximum amount of Rs.25,000 is allowed as a tax deduction. There are several criteria to be considered for categorizing children; for instance, male children are characterized as a dependent until they are 25 years of age and not employed. Whereas, the female child is eligible to be a dependent child until she is married. In addition to that, if any person is a senior citizen, then a maximum deduction amount increases to Rs.50,000.
Is maternity covered in standard health insurance policies?
Usually, health insurance companies do not cover maternity and related expenses. But a few companies like HDFC Ergo Health, Max Bupa have specific plans which offer maternity cover after specified waiting periods. However, they come with waiting periods varying from 2-4 years, so you need to read the fine print.
What if I miss the premium renewal date?
In case of a missed premium renewal due date, your insurance company is required to give you a grace period of 15-30 days. But, if you again miss making the premium payment during the grace period, there may be concerns including the fact that you may well be denied coverage, denied policy renewal, lose out on no claim bonus, or asked to serve with waiting periods from the start. At times, they may also insist on a fresh medical test.