Till a few years ago, there was no solution for Bedi’s problem. Most health insurance plans expired at the age of 60 and no insurer was ready to issue a fresh policy to a retiree. Not anymore. Insurance companies have devised innovative plans for senior citizens and have extended the age limit for renewing health policies to 100 years. 

 

So whether you are young or old, there is no reason why you can’t shield yourself against scorching hospital bills in your non-income years. 

 

Here are the different options in the market along with an analysis of their pros and cons.

 

According to a survey by Celent, a financial research and consultancy firm, 52% of those who have a health cover get it from their employers. Obviously, the policies lapse with their jobs. If you are one of those who didn’t supplement that cover with a separate plan, a huge chunk of your nest egg could be exhausted by a couple of expensive medical treatments. 

 

The solution — pick up one of the special plans with a minimum entry age of 60 years. “Senior citizens are at a higher risk of health problems. So we thought it fit to cover them under a separate health plan which would address their requirements,” says D Rama, AVP-product cell of Star Health Insurance, which has designed the Red Carpet plan exclusively for people over 60. Bajaj Allianz, New India Assurance, United India, Oriental Insurance and National Insurance also offer such plans. 

 

To sign up for these policies, you have to first undergo a battery of tests including echocardiogram, ultrasonography and cholesterol check-ups. Insurers reimburse only a part of this expense, that too, only if your application is accepted. These plans cover hospitalisation charges for something as minor as fever to critical illnesses. However, carelessness has its cost. The later you sign up, the higher is the premium.

 

 

For instance, at the age of 35, a RS 3-lakh cover costs only Rs 4,430 a year. But if you are 60 years old, the annual premium is nearly Rs 14,000. This is why Bedi, who opted for one of these plans, pays close to a hefty Rs 31,000 as annual premium. However, she is unfazed by the high premium — it is a small price for her peace of mind. There are other things that should concern her though. 

 

For one, the limited cover of these plans. Most do not offer more than Rs 3 lakh annual cover. This is hardly enough in an era when a knee fracture can put you back by Rs 1.5 lakh and a heart surgery skims off about Rs 3 lakh from your savings. Some plans, like Bajaj Allianz’s Silver Health, offer the option of a Rs 5-lakh cover, but they come with various riders. For instance, Silver Health does not allow claims exceeding Rs 15 lakh in five years. 

 

Says KK Agarwal, a senior cardiologist at Moolchand Hospital, Delhi: “As older people face multiple health problems, their medical expenses are high. Therefore, they need more, not less cover. This discrimination between young and old people is unfair.” There is a waiting period of two years before these policies cover common ailments of old age such as cataract, hernia, piles, gall bladder stone removal, sinustis, gout and rheumatism. Joint replacement surgery is covered only after four years. You must read the fine print carefully to detect other exclusive riders. For instance, the Varistha Mediclaim policy by National Insurance has a waiting period of 90 days for critical illnesses as well.

  

 

In the case of pre-existing diseases, insurers conduct extensive tests to ensure that the condition is controlled by treatment. Only when they are convinced do they provide cover, which becomes effective two years after buying the policy. This seems to be unreasonable, but compared to other plans where pre-existing diseases are not covered for the first four years, it is not a bad deal. 

 

But the biggest sore point is that the special plans come with a high co-payment limit. This means you will have to shell out up to 30% of the hospitalisation charges (Star Health’s Red Carpet Policy) even if they are within the limit of your cover. Let’s assume that you have racked up a bill of Rs 1 lakh, which is half of your Rs 2-lakh policy. Don’t think you won’t pay a penny from your pocket; you may have to cough up much as Rs 30,000 if the insurer’s liability is limited to 70% of the total cost.

 

Insurance firms claim this provision ensures that patients spend wisely. “This clause imparts a sense of ownership. Every insured person feels the need to at least check the hospital bills,” says Rama. You may not agree, especially as these plans seem to be loaded with other qualifiers. However, Rahul Aggarwal, CEO, Optima Insurance Brokers, suggests that you look at the larger benefits. “In old age, medical expenses are a certainty. Therefore, such plans are a boon for people who did not insure themselves earlier. Just make sure you compare all the options available and choose the plan that requires minimum medical tests and offers the highest cover,” he says.

 

 

So retirement is still some years away but you want to be prepared for the runaway medical costs after you hang up your boots. By a conservative estimate of 10% annual inflation, a Rs 2 lakh surgery will cost around Rs 8.35 lakh after 15 years. Clearly, it is never too early to start preparing for these expenses. The good news is that some insurers have extended the age limit of renewing a policy to 80 years. 

 

Therefore, you can choose from plans such as Bajaj Allianz’s Health Guard (80 yrs), National Insurance’s Mediclaim (80 yrs) and ICICI Lombard’s Health Advantage (70 yrs) that take care of your needs well into the twilight years. You can also opt for top-up plans after retirement to boost the cover of your base plan. 

 

Max Bupa has raised the bar for the industry by allowing people to enter its Heartbeat Plans at any age. “As the majority of healthcare costs are incurred during the later years of one’s life, we have not put any cap on the entry age of this plan,” says Damien Marmion, CEO, Max Bupa Health Insurance.

 

 

If only these plans were active even after retirement. However, you can still enjoy their benefits through your child’s group insurance policy. To include dependent parents within the health plan, companies charge a small premium from their employees. But the benefits far outweigh the extra cost. To begin with, there is no restriction of age or cover. Neither are medical tests mandatory. 

 

Also, unlike any other plan, pre-existing diseases are covered from day one. “It’s a win-win situation for everybody. The only catch is that these plans are flexible. Most of what you get depends on what the employer manages to negotiate with the insurer. It is possible that the employee is covered for a larger amount than his parent,” says, V Ramakrishna, MD, India Insure Risk Management. 

 

Another way of covering a dependent parent’s medical expenses is through a family floater policy. Unfortunately, these plans do not offer the same benefits as group plans. For instance, there is a cap on the entry age of the family members and pre-existing diseases may not be covered. But remember, in health insurance, something is always better than nothing at all.