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Cost Analysis of Parents and Health Insurance

Personal finance experts advise planning for short, medium and long term life goals. 

They also advise planning for foreseeable and sometimes unforeseeable expenses that you may have to incur. These are expenses like those for the hospitalisation of family members. Health insurance is one of the best ways to cover hospitalisation expenses. However, while buying health insurance for the whole family including parents, it will be helpful to know some tricks to avoid large premiums. 

Premiums are Linked to the Age of the Insured Person

When it comes to health risk, age is an important factor. Health risk increases with age.

Hence, insurers offer lower premiums for younger individuals than older ones. The premiums for your children might be very low. For you and your spouse, they may be in the middle range. For your parents, the premiums might be very high. 

Copay Clause

Also, some insurers have a co-pay clause for senior citizens. Copay means that the insured will have to pay for a part of the expenses claimed. Consider an example with a copay of 20%. The hospitalisation claim amounts to ₹10 Lakh.  Here, the insured person will have to pay ₹2 Lakh. The insurer will pay the rest, i.e. ₹8 Lakh.  

When it comes to health insurance for parents, the health insurance market is ripe and teeming with policies designed to meet specific needs. You have several options to choose from. Here, we have underlined the factors related to insurance which you should be considering while buying a policy:

Read on to know in detail what they are.

Option 1: Individual Policies

You can ask for a health insurance premium quote for each member from your shortlisted insurers. You might find that the sum total of the quotes is on the higher side. This is because insurers tend to offer lower premiums for insuring a group of people. The next option attempts to lower your premium by clubbing family members together.

Option 2: Family Floater Plan

The next option is to consider buying one plan for your parents or a family floater plan. You can provide details of each member and get premium quotes for a floater plan. You should get this from all the shortlisted insurers. 

Compare the quotes with the total of all premiums from the individual policy option. You might find the lowest quotes for family floater health insurance. 

However, if you have senior citizen parents, many insurers would have mandated a copay clause. Insurers tend to mandate copay clauses for senior citizens as the associated health risk is higher. 

Since everyone shares the same policy, the copay will probably be for everyone in the family. This is undesirable. Is there a way to have lower premiums and copay for only the senior citizen members? The next option tries to achieve just that.

Option 3: Family Floater for Non-Senior Members and Senior Policies for Seniors

The next option is to opt for a family floater for the non-senior members. Opt for a separate senior citizen health insurance policy for senior citizen parents. 

This option attempts to get you the best of both worlds. 

You get lower premiums for the non-senior members because they are in a floater plan. Because seniors are not part of this floater plan, there is no copay clause too.

While a specialised plan covers the senior members for seniors, this probably involves a copay clause. But it is restricted only for senior members. 

Attention

You should pay special attention to the following aspects of a senior citizen health insurance policy.

  • Mandatory Health Check-up

For seniors, most insurers will mandate a health check-up before purchasing the policy. This is to facilitate their estimate of the health risk and arrive at a premium quote. 

  • Cover for Pre-Existing Conditions

Pre-existing conditions are conditions, diseases or ailments which the insured person had before purchasing the policy. Some insurers provide cover for pre-existing conditions with specific terms, conditions and limits. In contrast, some insurers may not cover pre-existing conditions. 

  • Critical Illness Cover

Some insurers do not provide cover for critical illnesses for seniors. At the same time, some insurers cover certain critical illnesses. This cover is subject to terms, conditions and limits laid out in the policy document.

Opt for a Plan that Caters to Your Specific Needs

We have examined the major options to consider while purchasing family health insurance. Most people find the family floater for non-seniors and senior insurance for seniors option best. However, you should analyse your specific needs and opt for a plan that meets them best.


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