How is Parent’s Health insurance Policy Premium Calculated?
Are you constantly worried about the health of your parents? Well, you are not alone. Medical expenses today are invariably high and if you don’t have health insurance to provide you medical protection, you can quickly run into financial troubles. Hospitalization costs and treatments for older people is even more expensive so that doesn’t help either.
Luckily, the Indian Insurance market has a plethora of health insurance policies specifically designed for senior citizens and elderly parents above 60 years.
But before you do that, we suggest you learn how to calculate the health insurance premium so as to choose the best plan for your parents.
Here are the factors affecting the health insurance premium that you should know about:
- Past Medical History
- Policy Duration
- Body Mass Index (BMI)
- Smoking Habits
- Geographical location
- The Type of Plan You Choose
- Coinsurance Feature
Why you should get a Health Insurance Policy for your parents?
With increasing age comes the additional risk of contracting diseases and falling sick. Hence, having medical insurance to take care of urgent medical expenditure is a clever move.
Since our parents are more prone to illness given the deterioration in health and age-related illnesses, senior citizens may be required to visit hospitals often. And having a health cover is important to bear these expensive healthcare costs.
Most Health Insurance plans for parents cover pre-existing diseases as well as critical diseases.
Moreover, the financial burden of availing medical services without insurance may sometimes become heavy on your shoulders, so you should buy the insurance and be prepared for anything.
Availing health insurance provides a sense of financial security when it comes to your family’s health and hence gives peace of mind. Hence, it is imperative to have health insurance for your parents.
What all does a Parents Health Insurance Policy cover?
Plans for parents and senior citizens are specially designed keeping in mind their medical requirements. Here are important points to consider:
- Hospitalization Expenses: Keeping the skyrocketing hospitalization expenses in mind, an ideal health insurance plan should come with comprehensive coverage.
- Pre and post hospitalisation expenses: Health insurance plans also cover the medical expenses incurred before and after hospitalization. This includes expenses such as costs of diagnostics investigation etc. Most policy providers cover expenses incurred in 30 to 60 days but it can vary from one insurer to another.
- Daycare Procedures: Daycare treatments like varicose veins surgery, cataract operation do not require 24-hours of hospitalisation. However, they are covered by insurers. The number of day-care procedures depends on the plan opted.
- Pre-existing Illness: Pre-existing illnesses are covered in health plans, though after a waiting period. Specifically, for senior citizens, the lesser the waiting period the better is the policy as they are prone to age-related illness.
- Critical illness cover: Depending on the individual requirement, policies can be compared based on specific illnesses covered. Good health insurance would cover a wider range of critical illnesses like cancer, stroke etc.
- Major surgeries: Brain surgery, open-heart surgery etc. entail exorbitant costs. So, it is better to choose a plan that covers the expense of such surgeries.
How Health Insurance Premium is Calculated?
The premium is the cost against which the insured enjoys the benefits of the policy. It is important for every insured to ensure they get the benefits they deserve for paying the premium.
There is a broad range of factors that affects the calculation of premium for a health insurance policy. However, every insurance plan has a different method of calculating premium. This depends on the insurance company policies, what the insurance policy covers, and the profile of the insured.
Consider the following factors while determining the medical insurance premium:
- Age: The general rule of thumb followed by most insurers is- higher the age, higher the premium. Since your parents are at higher risk of suffering from illness than youngsters, their insurance premium is higher.
- Past Medical History: If your parents have a history of a particular illness or have a pre-existing disease, then their premium will be higher. But if they have had no illness and are relatively healthy, then your premium will be lesser.
- Occupation: The nature of your parent’s work and the amount of risk that they’re exposed to at work affects the premium charges. Suppose they work in a school, your premium will be less, but if they work in an environment like a construction site or a factory where the risk of being injured is high, then the premium amount will be higher.
- Policy Duration: If you choose a policy for your parents with a longer duration, the premium will be less. This may not be the same for a policy with a shorter duration.
- Body Mass Index (BMI): Premium rates are raised if the customer has a high BMI. People with high BMI are at risk of serious ailments including heart diseases, type 2 diabetes, breathing problems, high blood pressure and cancer.
- Smoking Habits: Smoking increases health risks, and insurance companies view smokers as high-risk insurance buyers. Therefore, people who smoke pay high premiums as compared to non-smokers.
- Geographical location: For certain geographic locations, the premium rates are high due to lack of healthy food options, climate, and health issues.
- The Type of Plan You Choose: Premium payments vary depending on the type of health insurance cover you choose for your parents. If you choose an individual health plan, the premium will be higher. If you opt for family floater or senior citizen plans, the premium will be lower. Also, if you have purchased add-on covers, the premium will increase.
- Coinsurance Feature: If you opt for coinsurance, your premium will be less. In coinsurance, for any claim, you pay a specific portion of the claim, and the insurance company gives the rest. This step reduces the premium amount significantly.
After considering all these factors, use a health insurance calculator to get an estimate of the final amount of the premium. You can use any online insurance premium calculator to calculate the estimated premium.
The rising medical expenses have made it extremely difficult to manage the medical expenses of your parents. The Covid-19 outbreak has made our parents more vulnerable than ever. As they get older, they are challenged by the ever-going physiological changes in their bodies. This requires them to pay special attention to their immunity, bones, joints, and muscles.
So, make sure you choose a plan that covers all their medical requirements and at the same time doesn’t burn a whole in the pocket. It is important that we create opportunities to foster healthy aging for them through proper medical care.
You would want the insurance plan to be as comprehensive as possible to provide full protection to your parents. It is better if you separate insurance plans for each of your parents because both of them are equally vulnerable and proper health cover, must be ensured for both. A grace period is a time provided after the premium due date during which the policy is considered to be in force with the risk cover. This grace period is usually 30 days but may vary for different plans. In most cases, if a valid claim arises under the policy during the grace period, the claim is still honored by the policy provider. In such cases, the due and unpaid premium may be deducted from any benefit payable. In case you do not pay premiums before the end of the grace period, the policy with lapse. All risk covers will cease and no benefits will be payable in case of lapsed policies. Under section 80D of the Income Tax Act 1961, you can avail tax benefits on health insurance policies. Senior citizens can avail of a tax benefit of a total of Rs.50,000 for one year.
Should I buy separate health insurance plans for each of my parents?
What will happen if I don't pay the premiums?
Does Parent’s Health Insurance come with tax benefits?
You would want the insurance plan to be as comprehensive as possible to provide full protection to your parents. It is better if you separate insurance plans for each of your parents because both of them are equally vulnerable and proper health cover, must be ensured for both.
A grace period is a time provided after the premium due date during which the policy is considered to be in force with the risk cover. This grace period is usually 30 days but may vary for different plans. In most cases, if a valid claim arises under the policy during the grace period, the claim is still honored by the policy provider. In such cases, the due and unpaid premium may be deducted from any benefit payable. In case you do not pay premiums before the end of the grace period, the policy with lapse. All risk covers will cease and no benefits will be payable in case of lapsed policies.
Under section 80D of the Income Tax Act 1961, you can avail tax benefits on health insurance policies. Senior citizens can avail of a tax benefit of a total of Rs.50,000 for one year.