It is advisable to buy a policy that offers more comprehensive coverage
In premium terms, the difference between a comprehensive policy and one with restrictive coverage could be a few thousand
After the first wave of Covid-19, Nitin Gupta (name changed on request), a resident of Mohali, decided to buy a policy for his parents, aged 75 and 71. “The biggest issue in this purchase is that if you want a higher sum insured for senior citizens, the premium becomes exorbitant,” says Gupta. Another factor which makes decision-making difficult is that different insurers offer varied features. “It is difficult to know which ones are crucial and which ones are cosmetic,” he adds.
Road map for buyers
Find out if the senior citizens have pre-existing diseases (PEDs). “If the condition is severe, the insurer could turn down your proposal,” says Amit Chhabra, head – health business, Policybazaar.com. Those with mild conditions stand a better chance.
Sometimes, you may be offered a policy with a waiting period for PEDs. “If you are 70, you need to evaluate whether a policy with, say, a four-year waiting period is worthwhile,” says Indraneel Chatterjee, co-founder and principal officer, Renewbuy.com.
Next, decide the premium you are willing to pay. “Some policies offer comprehensive coverage while others come with restrictions. The former cost more,” says Chhabra.
The buyer also needs to decide the kind of underwriting he is prepared for – physical medical tests, tele underwriting, underwriting based on past documents, or none at all. Your choice of procedure will decide the universe of insurers you can buy from.
How much co-payment
In a senior citizen’s policy, the key criteria is the co-payment you are willing to pay. It works as follows. Suppose the hospital bill is Rs 5 lakh and there is a co-payment of 20 per cent. First, the insurer will remove the bill for consumables, which could be, say, Rs 50,000. The bill then comes to Rs 4.5 lakh. Of this, the customer will have to pay 20 per cent, or Rs 90,000. Thus, the insurer only pays Rs 3.6 lakh, while the customer pays Rs 1.4 lakh. Higher co-payment translates into a lower premium, but it also means you shell out more at the time of claim.
Instead of co-payment, a policy could come with a deductible. Usually, this is a fixed amount (sometimes it is a percentage of sum insured). If a policy comes with a deductible of Rs 50,000, it means the first Rs 50,000 of the bill has to be paid by the insured and the rest is paid by the insurer.
Room rent capping is another key factor. It could be, say, one per cent of sum insured per night. If the sum insured is Rs 10 lakh, the maximum the customer can spend on room rent is Rs 10,000 per night. Policies that come with a lower room rent capping are cheaper. But it is best to avoid capping or select a policy with higher capping.
The final factor is the waiting period for PEDs. Here, lower is better. Decide the mix of these factors, and the pricing, that suits you.
What should you do?
It is advisable to buy a policy that offers more comprehensive coverage. In premium terms, the difference between a comprehensive policy and one with restrictive coverage could be a few thousand. But the difference in the claim amount you have to bear (if you, say, choose a higher co-pay) could run into lakhs.
On whether to choose co-payment or deductible, Chhabra says: “A deductible is preferable if the bill is large.” If the deductible is a fixed amount, your liability gets capped. In co-pay, it keeps increasing with the bill amount.
Many policies – including the recently launched Senior First by Max Bupa Health Insurance – now offer telephonic underwriting. Reveal all the diseases, accidents and surgeries you have undergone in the past and all your current conditions to avoid the risk of claim rejection.