How to Select the Right Medical Insurance
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2 July 2008
More than any other age group, senior citizens require health cover the most. However, given the number of senior citizens being hospitalised, insurers have hiked rates to a large percentage of the sum insured.
For instance, if a 25–year–old individual pays 1.5% of the sum assured as a premium, then the same number can be as high as 8% of the sum assured for a 60–year–old individual.
“An insurer prices a policy based on two risk factors. One; for how long an individual is required to stay in the hospital and two, what the individual stands to lose because of the sickness. These risk factors are high and are common among the senior citizens”, said Rahul Aggarwal, CEO, Optima Insurance Brokers and CEO click2insure.in.
For instance, a senior citizen admitted to hospital with a stroke may stay long in the hospital even if a surgery is not called for, Mr Aggarwal added. However, the fact remains that despite high prices, senior citizens need insurance as medical treatment can actually wipe out their savings. Today, there are a number of public as well as private sector players offering mediclaim for senior citizens. Here are various categories:
Sum assured and age limit
National Insurance offers health insurance to individuals in the age band of 60–80 years. However, individuals can renew their policy up to 90 years of age. The increase in age is factored by a rise in the premium. If you fall in the age group of 60–65 years, you have to pay a premium of Rs 4,180.
This number goes upto Rs 6,890 for an individual who falls in the age group of 76–80 years. National Insurance provides a maximum cover of Rs 1 lakh while United India covers up to Rs 3 lakh. Bajaj Allianz covers up to Rs 5 lakh. Star Health covers the age group of 60–69 years under its Senior Citizens Red Carpet policy with a maximum cover of Rs 2 lakh.
However, the insured has to bear 30% of the bill. Similarly, an individual has to bear 10% of the hospitalisation charges if he/she has signed up for National Insurance. Bajaj Allianz Silver Health Plan offers medical reimbursement for hospitalisation expenses for people aged between 46 and 75 years.
Know your sub–limits
Policies like Varishta Mediclaim and Star Health’s Senior Citizens Red Carpet policy come with sub–limits. Common sub–limits imposed by insurers are room rents, doctors’ fees and diagnostics. These policies cap the room and boarding cost at 1% of sum insured a day and at 2% a day for those in an intensive care unit.
The overall limit is capped at 25% of the sum insured for an illness or injury. So, when you sign up for a policy, check if the insurer has assigned a maximum amount for a specific expense.
Clause on pre–existing diseases
In Varishta Mediclaim, for an additional premium, from policy inception, you can cover two pre–existing diseases, diabetes and hypertension. But if any ailments related to these are diagnosed at the time the policy comes into force, they won’t be covered.
Typically, most insurers leave out these two ailments or cover them only after two or three claim–free periods like United India. Star Health does not cover pre–existing diseases for which a person underwent treatment or was diagnosed immediately preceding 12 months from the date of proposal.
If you have decided to cover your golden years, it’s equally important to choose a cover that comes to your rescue when you need it the most. In some cases, you may realise that many insurers offer premiums almost 30–40% cheaper than the rest.
Before taking up such economical policies, it’s better to check the company’s claim settlement history, says an official with a public sector insurance company. “Even if you spend few thousands of rupees more or less as the premium for your health care costs, it’s still worth the buck only if it helps you when you need it the most”, he adds.