How to pick the right health insurance plan for your parents
Increase in age pushes up the premium and gives restricted coverage to diseases. Here's what you should keep in mind before buying insurance for your parents
By Revati Krishna | Jan 18, 2019
Considering the rising medical costs, an illness in your family can easily create a dent in your pocket. Don't want to deplete your savings in case of a medical emergency? Get a health insurance cover for yourself and your parents. According to Kapil Mehta, co-founder, SecureNow, health care inflation is around 15%. We tells you the things you should keep in mind before buying a plan.
The sooner you buy a health insurance, the better it is for your finances. "Plan your parents' health insurance when they are still considered young parents. Increase in age pushes up the premium and gives restricted coverage to diseases," said Mahavir Chopra, director, health, life and strategic initiatives, Coverfox.com, online insurance broking company. Chopra said the number of individuals buying health plan for their parents on his portal has gone up to 10,000 this year from 7,000 plans last year.
There are multiple health insurance products available in the market. "There are more than 35 policies and 20 insurers in the market," said Mehta. How do you choose? "It is important to have a plan with maximum coverage and minimum exclusions," said Ashish Mehrotra, chief executive officer and managing director, Max Bupa Health Insurance Co. Ltd. You also need to consider the illness and surgeries your parents may have to undergo. It is better to go with a plan that offers higher sum assured, said Mehrotra. As a thumb rule, you can consider a cover of Rs 10 lakh- Rs 20 lakh each depending on the city your parents live in.
Start with checking the exclusions on pre-existing diseases. If your parents are suffering from an illness at the time of buying the plan, the policy may either exclude it permanently or cover it with a waiting period. The waiting period should range between two years and four years. "It is important to check the details as an aged parent may need hospitalisation during the waiting period, but the insurance company may not accept the claim," said Mehrotra. For instance, Bajaj Allianz Health Guard has a waiting period of three years for pre-existing diseases. Also, any disease contracted during the first 30 days of commencement of the health insurance policy is excluded from coverage.
Certain diseases such as hernia, piles, cataract and sinusitis will be covered after a waiting period of two years. You may come across plans where the coverage varies with diseases. "If a single health insurance plan caps the coverage for every single disease it covers, stay away from such plans," said Mehta.
Co-pay amount, in insurance jargon, is the percentage of the claimable hospital bill that you will have to pay. Avoid plans with higher co-pay amount. For instance, in Max Bupa Heartbeat policy, there is an option of 10% to 20% co-pay for individuals below 65 years of age. However, it is mandatory for anyone above the age of 65 years. This co-pay reduces by 5% at each renewal making it zero at the 4th renewal.
Claim settlement ratio
As the name suggests, claim settlement ratio is a ratio of the number of claims paid to customers by the insurance company to the total number of claims. "You should purchase health insurance from insurers that have a 90% claim settlement ratio. This information is available in the public disclosures on insurer's websites," said Mehta.
Single or floater
A family floater plan provides health cover to the entire family with a single limit that can be utilised by any member. For example, if you purchase a family floater for Rs 5 lakh, any member can utilise that amount. But if one member utilises the policy and claims a large amount in a year, surpassing or meeting the cap, other members will not be able to avail it. It is not advisable to take such plans for your parents because of the high age and risk element involved. "For senior citizens, it is better to have a separate policy, so you remain insulated from each other in terms of risk," said Chopra.
In arrangement with HT Syndication | MINT