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Pros & Cons of Senior Citizens’ Health Insurance Coverage

We all would agree that a few decades back, nobody could ever think of concepts like Senior Citizen Health Insurance. The reason is quite simple. The life expectancy was close to 60, and if you know you are eventually going to die when you are close to 60 why would you care to pay insurance premiums for the older age cover. Times have changed now for good; thanks to better medical facilities and also better nutrition and standards of living. With people living longer than 70 years, 80, or even 90 years, there is a hope that we will survive long after we cross our retirement age. This led to people caring more about their health, and focus on the need to be financially independent of their children. 

Like all markets, insurance companies have been smart in making products specifically designed for the old age population, i.e. Senior Citizen Health Insurance Plans. However, these policies are different from an average general health insurance plan for adults. They have their advantages and disadvantages over any general health insurance plan, and this is the point of discussion in this article. Let us start with the pros and then look at the cons of these plans. 

Pros of Senior Citizen Health Insurance Coverage

1.    Higher sum assured

What is the one thing that you look for the most when you are in your old age? It is a fact that you should not be dependent on anyone for looking after your medical expenses. Well the Senior Citizen Health Insurance takes care of that, the sum assured is much higher than regular insurance. It comes at a price in the form of higher insurance premiums. Still, the higher coverage amount is the need of the year at such an age. 

2.    Benefits in Age

Contrary to Regular Insurance, the Senior Citizen Health Insurance helps an individual to take insurance even at later stages of life. Regular insurance gives you coverage only until you attain the age of 65. While Senior Citizen Insurances are available only for people aged 60 years or more and the allowed entry age is generally extended to 70 years. Moreover, you can renew this policy, while some renew for lifetime others renew until a specific age, i.e. when you are close to 80 years.     

3.    Cashless Treatment and medical treatment expense cover

The Senior Citizen Insurance comes with unique features that are not available in any regular insurance plan. These include Cashless treatment for you at the network hospital, provided that you are admitted for a minimum time of 24 hours. This facility includes expenses such as medical bills, doctor bills, etc. which you can claim in a hassle-free manner. Furthermore, the insurance has a broader health coverage at includes pre-hospitalization, post-hospitalization, and in-hospitalization expenses that are usually not covered by your average general insurance.    

4.    Pre-Medical screening and regular health check-ups

You may have noticed that health insurance usually does not come without your full-body screening. Based on this screening, you may be altogether denied the insurance. However, in the Senior Citizen Health Insurance plan, this screening is usually done away with. Furthermore, all the expensive health check-ups are entirely free in this plan. You do not have to pay a single penny for the pre-policy health check-up, mostly if they are done in the prescribed network hospitals. Finally, these plans allow you to take a second opinion (usually online) once every year completely free. 

5.    Special Discounts and No-Claim Bonus

Though the premium on this policy is very high, these policies help you save money through other benefits. These include special discounts on total premiums if you purchase this policy along with your spouse. Furthermore, the no-claim bonus or the NCB is usually higher in these policies and can typically range from 20% to 100%. NCB is normally given as enhanced cover, instead of as discounted premium.

6.    Tax Benefits

Finally, the insurance could be used as a measure of tax planning. All the premiums paid on senior citizen health insurance plans allow you to deduct up to a maximum amount of Rs.50,000 on taxable income as per the provisions of Section 80D of the Income Tax Act, 1961. 

While we had a look at the advantages, these plans are not perfect, and there are a lot of factors which make them less attractive. Some of the major ones are discussed below.

Cons of Senior Citizen Health Insurance Coverage

1.    High Premium and Age Band

The premiums on health insurance plans increase with age. This makes the senior citizen health insurance plans very expensive for an average income family. Furthermore, if we compare health insurance plans dedicated to senior citizens to regular insurance plans, the premiums paid on dedicated plans are higher. This is generally true because of the presence of younger people in the same pool as senior citizens in a regular plan which makes the claim ratio, and thus, the premiums less. 

2.    Compulsory Co-Payment

If there is one thing to expect compulsorily along with senior citizens insurance plans, it is a compulsory co-payment. Co-payment essentially means that if your hospital bills come out to be Rs.1,00,000 and the co-payment is 20%, then the insurance company pays Rs.80,000 and you are required to pay Rs.20,000 from your pocket. No doubt, this makes the premium lesser, but as earlier stated, it is a more secondary saving as compared to unforeseen higher damage.

3.    Sub-Limit on Hospital Expenses

Senior Citizens plans also come with sub-Limits on different diseases. A sub-limit essentially means the maximum amount that you would be covered for a specific disease. These could include doctor’s fees, surgery expenses, medicine cost, room rent, etc. This means that if you have total coverage of Rs.10 lakhs, but your room rent sub-limit is only Rs.50,000, then if your room rent amounts to Rs.60,000 then insurance would cover only till Rs.50,000, the remaining Rs.10,000 would have to be borne personally. This is a big problem with this coverage. 

4.    Waiting Period

One should be very careful with the waiting periods. After taking the insurance, you cannot make only accidental claims in the first 30 days. Along with this, there are specific waiting periods for different diseases; these could range between 1 and 4 years. This means you can’t claim insurance until the waiting period is over.  

5.    Pre-Existing Conditions

Pre-existing conditions may not be an essential clause if you are young and healthy, but it matters if you are a senior citizen. Different companies have different clauses regarding the treatment of pre-existing illnesses. While some allow for coverage after 24 months, others allow it only after the completion of 36 months. The companies may up early, but, this could either be a proportion of the entire amount or it would be paid only after payment of extra premium. 

6.    Exclusions 

Not every particular disease or condition is covered under the purview of the Senior Citizen Health Insurance. Some of the exclusions include the cost of dental treatment, the cost incurred in the treatment of HIV-AIDS, the cost of cosmetic surgery etc. Additionally, expenses incurred on treatment of drug-related problems, along with injuries sustained during the war, and riots, strikes, etc. are also not included in the final coverage. 

All in all, taking a health insurance plan when you grow old is very important. However, remembering the pros and cons of the Senior Citizen Health Insurance Scheme will go a long way to make you realize that whether it is the correct scheme according to your needs. Furthermore, it would tell you about the factors that you should look forward to when you purchase a Health Insurance Scheme when you grow old.

Senior Citizens Health Insurance Pros and Cons

Is there any limit to the number of claims that I can make under the Senior Citizen Health Insurance Scheme?

No, there is no limit on the number of claims. The only limit is on the total amount that you would be covered up too. This means that if you have coverage worth Rs.10 lakhs, you can use it to pay for your health expenses ten times or 20 times, but the cumulative amount should not exceed Rs.10 lakhs.

What are the different kinds of Waiting Periods?

Essentially, there are four significant types of waiting periods:

1. Initial Waiting Period – This means that you can only claim accidental claims for the first 30 to 90 days depending on the policy.
2. Disease-Specific Waiting Period – This may be for one or two years. Some of the diseases that come under it are ENT, tumor, hernia, etc.
3. Pre-Existing Illness Waiting Period – This is a particular waiting period for diseases you have suffered before taking insurance. The period ranges from 12 months to 48 months.
4. Maternity Waiting Period – This waiting period can vary from 9 months to 4 years, depending on the specific policy.

Can the policy expire if it is not renewed in time?

Initially, you get a grace period of 15 days to pay the premium after the expiry of the insurance. However, coverage would not be available in this period unless the premium is paid. The insurance contract expires if the premium is not paid by the expiry of the grace period.

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