Plans for the salt-and-pepper haired

Tough regulations from the insurance watchdog and competition in the insurance space have expanded health insurance options for the elderly.

Tough regulations from the insurance watchdog and competition in the insurance space have expanded health insurance options for the elderly. As opposed to a few years back when insurance companies were quite wary of offering health covers to people above 50 years of age,there is a marked change in the industry today. A number of health insurance providers are now offering special plans for senior citizens. Max Bupa Health Insurance,for instance,has unveiled a plan that offers insurance even to a 100-year-old.

Change for good

As one gets older,propensity of health risks rises. A 65-year-old man will be more prone to diseases and other health ailments compared with a 35-year old. Therefore,the probability of filing a claim is more in case of a 65-year old. As a result,insurers were a little reluctant in offering health covers to older people.

To put things straight,IRDA in 2009 directed insurers to keep the maximum age at entry to buy a fresh health insurance policy as 65 years. Since then,scenario has improved a little.

Problems that need to be addressed

Inadequate cover. Barring a few insurance companies,health insurance providers do not allow the sum assured to be more than Rs 2 lakh to 3 lakh in case of senior citizens. This sum may not be enough as major treatments associated with older ages are much more expensive. A heart by-pass surgery could Rs 3 lakh to 5 lakh in a private hospital.

No medical check-up. No company asks for a medical check-up up to the age of 45. While this makes the process hassle free for the insured as well as the insurance companies,it could lead to confusion. A number of times either patients willfully hide any pre-existing diseases or are not aware. In such a case,theres always a possibility of rejection of claim by the insurance company. Companies should get medical check-ups done of the insured before underwriting their policies. This will ensure transparency in the system and reduce the chances of fraud.

Important points to note

Co-payment. Most insurance companies have a co-payment clause in case the insured is above 60 years of age. In such a case,usually the companies pay only 70- 80 per cent of claim and balance has to be borne by the insured. This is an active step to reduce any moral hazards arising from complete insulation from monetary risks.

No-claims bonus. A health insurance policy entitles you to a no claim bonus of usually 5 per cent in case you havent made a claim in the previous year. For example,if a 25-year old has been renewing a Rs 3 lakh policy for five years in a row without a claim,sum assured could increase up to Rs 4 lakh Rs 6 lakh at the premium amount.

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Pre-existing diseases. Insurance companies do not cover diseases that you might have at the time of buying a policy. They usually wait for at least 2 to 4 years before covering pre-existing diseases. Hence it is advisable to choose a suitable health plan early in life and stick to it rather than changing it time and again.

Again,at older ages,you cant enjoy the benefits of a family floater policy. Most insurance companies will give you individual cover but no option of protection of the entire family under one umbrella.

But as the health insurance industry is evolving,we can soon expect wider array of products and choices for senior citizens. Till that becomes a reality,it is better to buy a plan at an early age.

The writer is chief executive officer of Policybazaar.com