Buying a health insurance plan for your parents?

Old age brings with it health issues and the likelihood of hospitalisation. This is why having adequate health insurance is a must. The COVID-19 pandemic has also underscored the need for having health insurance, especially for senior citizens. If your parents don’t have a health insurance plan, buy one now. The more you delay in buying health insurance the tougher it will be to get adequate coverage at a reasonable premium. Read on to know what you should keep in mind while selecting a health plan for your parents.

1)  Disclose your family’s medical history and pre-existing diseases – If your parents have comorbidities, i.e. pre-existing medical conditions, take those into account when buying a health insurance plan. For pre-existing diseases, health insurers usually have a cooling-off period also called a waiting period (usually 2 to 4 years, varying from insurer to insurer). After this waiting period, the coverage includes all pre-existing diseases. Select a health plan with the least waiting period. Some insurers offer a waiver of the waiting period if you pay an additional premium. Do not make the mistake of concealing the pre-existing diseases from the insurer. If in future, the disease comes to light at the time of hospitalisation, the insurer could reject your claim because the information was not disclosed. To avoid such situations, be upfront about all pre-existing ailments while applying for the health plan. If a new disease is diagnosed after the policy is bought, it is not construed as pre-existing and is usually covered under the plan.

2)  Buy an optimal health insurance cover – As parents grow older, their susceptibility to ailments increases, which is a health risk. Besides, taking into consideration medical inflation, the higher the health insurance coverage, the better it is. And ideally, if you can increase the sum insured by 8-10%, that is even better so that the family’s finances are not impacted in case of a medical emergency. You could supplement your family’s base plan with a top-up plan only for your parents. The advantage is that premiums for top-up plans are cheaper than a regular health plan. And it will come into effect once the base plan’s sum assured limit is exhausted. So, you would be paying a lower premium than if you were to increase the sum assured for the entire family’s plan. You could also buy riders by paying an extra premium, which will help expand the scope of the insurance plan.

3)  Check entry age and renewal – Age is another important criterion when purchasing a health insurance policy for parents. The entry age criterion could range from 55 to 80 years across insurers. But the earlier you opt for a health plan for your parents, the better it is so that the coverage begins earlier and the premium remains comparatively lower.

It is advisable to opt for a plan that allows renewals without any age limit (a lifetime renewal) even if it means a higher premium; or at least has a reasonably high maximum age limit for the renewal of such a policy. This would ensure adequate coverage even at a higher age when the health risk is high.

[Also Read: Is there a perfect health insurance mix?]

4)  Choose an insurer with a large network of hospitals – Every health insurer has a network of hospitals, where you can get cashless treatment. Check if the insurance company has a large enough network in the city you are living in. At the time of hospitalisation, a network hospital is more convenient for the insurance claims, as opposed to getting the claim reimbursed in case of treatment at a non-network hospital. This will help in planned as well as emergency hospitalisations.

5)  Evaluate health plan’s features carefully – Do not simply select one with the least premium. Here are some aspects to keep in mind:

• Is there a co-pay clause (a clause in health insurance plans that requires cost-sharing by the policyholder)? Most health insurance plans usually include this clause for senior citizens. You must check the proportion to be borne between the insured and insurer. A high co-pay clause would mean that you would end up bearing a high amount in case of a claim.
• Ensure that the room rent limits are as per your policy limits. The insurance company will only pay the rates (for all procedures and treatments) that are corresponding to the room rent limit specified in your policy. This means, if you opt for a room that has a higher rent, the insurer will deduct the differential room rent as well as the associated medical expenses, such as charges for operation theatre, diagnostic tests, doctors’ fees, etc. Hence, you could end up paying more out of your pocket even if the total bill is lower than the sum insured.
• Check the limit on the cost of preventive health check-ups like x-ray, CT scan, MRI, Cardio Doppler test, etc. Also check the limits on the ICU charges, the cost of treatment, surgeries (including the major ones), etc.
• Check whether day-care procedures viz. cataract, corneal incision, varicose veins surgery, etc. and Ayurveda treatments would be covered and if yes, the limits thereto.
• The number of days of pre and post-hospitalisation expenses allowed to be claimed

The health insurance premium you pay on behalf of your parent will entitle you to a deduction under Section 80D. The total deduction you can avail (including for your health insurance policy) is Rs 75,000 per annum if your parents are over 60 years and above, and if below the age of 60, then Rs 50,000 per annum.

Axis Bank has tied up with leading health insurers such as Aditya Birla Health Insurance, Digit Insurance and Tata AIG General Insurance, offering a range of health insurance plans. Visit our website to select a perfect health insurance plan suitable for your parents.

Disclaimer: This article has been authored by PersonalFN, a Mumbai based Financial Planning and Mutual Fund research firm. Axis Bank doesn't influence any views of the author in any way. Axis Bank & PersonalFN shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.