A study about the average age of parents at a child’s birth are showing interesting results. The average age of parents during childbirth is trending towards early to mid-thirties. Also, it has been increasing in the last few years. There is a trend where people have kids at a later age than before.
Parents tend to become senior citizens by the time children start earning
Also, children are increasingly starting to earn at a later age than what they used to. So it’s likely that the children- now adults-are in their mid-twenties when they begin to earn. These children are starting to earn later and parents having kids later gives rise to an interesting situation. Increasingly, parents tend to be senior citizens when their children start earning.
The degree of health risk is tied to the age of the insured person
This is the classic cardinal rule of health insurance. The older you are, the more health risks are associated with you. Hence, insurers tend to charge higher premiums for insuring people of higher age. That’s the reason why it’s always a good idea to buy health insurance at an early age.
Copay
Some insurers tend to offset the higher premium charged to the customer by introducing copay. Copay is a fixed percentage of the expenses that the insured person has to pay. Consider a case where the copay on a policy is 20%. The claimed medical expenses are ₹5 lakh. In this case, the insured person will have to pay ₹1 lakh. The insurer will pay the rest of the claimed amount, i.e., ₹4 lakh.
Senior citizen health insurance tends to attract copay
Because health risk is tied to age, senior citizen health insurance attracts higher premiums. However, everyone cannot afford the higher premiums. Hence, insurance companies tend to lower the premium by introducing a copay clause for senior citizens.
You might attract copay if you add senior citizen parents to your health insurance policy
Adding senior citizen parents to your health insurance policy might attract a copay clause. It would have been better if only the senior citizen’s health cover attracted copay. However, the cover for everyone in the policy will now attract a copay clause.
Copay for every claim made for all the insured persons
It means that every time you make a claim, you will have to copay, even for claims made for your children, spouse or self.
We know that insurance premiums are linked to the age of the insured person. The relatively younger members of your family will attract lower premiums. You need not reduce their premium further by introducing the copay clause.
Having a copay clause for all members of the family is not a good idea
Consider the case where you have to copay for all members of the family. Having a family member go through hospitalisation for a disease or a condition is bad enough. What’s worse is the financial burden that might ensue.
For every claim for every member, you will have to copay. This might burn a hole in your financial plan. If your money is locked in investments, you might need to borrow from friends and family. It might take a long time for you to recover from this financial burden. This, in turn, might delay the fruition of your major life goals. This is not a very favourable outcome, right?
The Problem
On the one hand, you would like every member of your family to be insured. Including your senior citizen parents, yourself, your spouse and your children. While, on the other hand, you do not favour the copay clause for all. So, what can you do in this situation?
The solution has two parts:
Separate health insurance for senior citizen parents
Senior citizen health insurance plans are designed specifically for senior citizens. They tend to attract either a higher premium or a copay clause, or both. When you purchase a separate plan for senior citizen parents, these are restricted to their insurance.
Separate health insurance for non-senior citizen family members
Purchase a separate family floater plan for the non-senior citizen members of the family. Lower age and subsequently lower premiums are still on their side. Also, this separate policy may not attract the copay clause.
One Size Fits All Does Not Always Work
One size fits all, i.e. a common family plan may not work with senior parents. Evaluate these aspects of the health insurance policy options.
Diversify your Health Insurance Cover for More Benefits at Lower Premiums and Copay
Evaluate a common family floater against separate policies. Go through all the aspects mentioned above to get the most cover for your family. In most cases, the diversified separate insurance policies might work better.
Read the article Is Health Insurance for Parents and Senior Citizens Different? to know more.