In recent years, life expectancy is witnessing an increase, thanks to growing advancements in medical and healthcare technologies. However, medical costs are simultaneously increasing due to medical inflation. Health insurance therefore becomes vital to tackle medical crises and save on medical costs.
While it is a breeze for younger people to get a health insurance policy, the same becomes a tough task for senior citizens. Once a person begins nearing the 60s, a key question that comes to mind is – “Can I buy health insurance at the age of 60 and above?”
If you too are nearing 60 and are unsure about being issued a health insurance policy, there’s hope. The Insurance Regulatory and Development Authority of India (IRDA) has mandated that general insurance companies must have a maximum entry age of at least 65 years for a standard health insurance policy. Therefore, no insurer can refuse to cover an older person or charge him extra premium without providing a fair and valid reason for doing so. IRDA says, “Such reasons should stand the scrutiny of reasonableness and fairness.”
However, getting insurance at 60 (or later) could mean lower coverage, lower policy term, higher premium, and a range of mandatory medical tests. Why is it so? Because with progressing age, the chances of having a medical crisis/health disorder exponentially increase. When an individual is close to 60, factors like reduced physical activity, a sedentary lifestyle, chances of having a pre-existing disease, etc. all come together and put the person at a higher risk for health problems.
Choosing the Right Health Insurance Plan at 60
Not having health insurance is risky, more so if you are a senior citizen. You could offset your risks with the following options:
1) Group Cover:
If you are still employed, you could use your employer’s group coverage. If retired, you could have yourself added to your children’s group coverage. However, loss of employment either for you or your children could leave you without health cover.
2) Personalised Health Cover:
This is a more stable, reliable, and realistic option. Although getting a personalised health insurance policy at 60 years and above will require you to pay a higher premium, in case any medical crisis arises where you need to be hospitalised, every penny of that high premium will be worth it.
Several insurance companies have specially designed health insurance plans for those aged 60 and above. You would be the best judge about which plan is best suited to your specific health needs and current health condition.
Explained below are some health policy aspects that could help you make a more informed choice when thinking of buying health insurance at 60:
The insurance Company’s Claim Settlement Ratio (CSR)
The claim settlement ratio is computed as a percentage of the claims honoured by the insurance company to the total claims the company receives. It is highly recommended to pick a company having a high CSR. After all, the last thing anyone would want is to face hassles and delays during claim settlement.
Most health insurance plans for older people have an insurance sub-limit for specific diseases, meaning, the insurance company does not provide coverage over that pre-determined limit for those specified disease. To avoid surprises at the time of filing claims, it is advisable to compare insurance sub-limits offered by different service providers and pick the plan that is in line with your personal health and family health history.
Earlier, health insurance policies for senior citizens could usually remain in force till the policyholder turned 90. However, some insurance companies have recently started offering lifelong renewal health policies for senior citizens. When buying a health plan at an older age, it is important to be aware of the policy’s age limit and pick the one that gives excellent protection for the longest term.
Health insurance policies for the elderly usually come with a co-payment clause. This means that the policyholder undertakes to pay a fixed percentage of his/her medical expenses out-of-pocket in case of a claim, thus lowering the insurance company’s risks. The co-payment percentage is specified in the policy document – it is usually around 10-20% for senior citizen health policies. In some cases, it could be as high as 40%.
In a policy with an 80:20 co-payment clause, the policyholder’s liability is set at 20% in the event of a claim. Higher the policyholder agrees to co-pay, lower is the insurance company’s risk, hence the policyholder’s annual premium outgo becomes lower.
If your financial capacity permits, you may opt for a higher co-payment percentage. This would translate to a win-win situation for the insured as well as the insurer – lower premium for the former and lower risks for the latter.
Pre-existing Diseases Clause
All health insurance policies come with a waiting period for pre-existing diseases, although the duration may vary between insurers. An elderly policyholder who has a pre-existing disease would need to pay a higher premium.
However, since group insurance policies offer coverage for pre-existing diseases, the ideal health plan would be a blend of a personalised/individual health plan and a group insurance plan (as specified above).
About Senior Citizens’ Health Insurance Plans
Entry age: Most PSU companies offer mediclaim policy for senior citizens aged between 60 and 80. Some companies however limit the entry age for senior citizens to 69 years. Several private insurers offer health insurance without any maximum entry age.
Renewal age:This is the age limit up to when the policy can be renewed. Although the limit is generally 90 years, it may vary between different insurance companies.
Premium: An elderly policyholder is generally prone to ill health or may even be suffering from a pre-existing disease, as a result of which the insurance company charges an extra premium. This is to compensate for the additional risk the insurance company takes on to cover an older policy holder.
Sum assured: Public insurers providing health insurance for senior citizens offer lower coverage compared to private insurers. While the former offers around one to two lakhs sum assured, private insurers can offer as high as 15-20 lakhs under family floaters. However, the premium and co-payment clause must be paid attention to.
Tax benefits: Premiums paid for senior citizens’ health insurance policies are tax exempt under Section 80 D of the Income Tax Act.
No Claim Bonus: If you purchase a senior citizen’s health policy and do not make any claims in the policy year proceeding the year of subsequent policy renewal, the policy’s sum assured will be increased by a certain percentage, as specified in the policy. This percentage varies from company to company and the bonus so earned is called the No Claim Bonus (NCB).