May 27 , 2013
Once past the middle age you cannot afford to be without a health insurance policy. Terms and conditions of mediclaim for those in their 50ies are somewhat different from those for younger people, especially if you are a first-time buyer. We will take a quick look at what things you should remember while choosing a health insurance cover.
Rise in premiums
Don't be upset with the fact that health insurance premiums rise with age. The reason is simple- risks of requiring medical care increases with age and ultimately insurance policies are mechanisms to cover risk.
Similar to motor insurance, health insurance contracts are short term ones, unlike life insurance. You need to renew the policy every year (or once in two years) and abide by the terms laid down by the insurer.
Another thing you should know is that in health insurance, premiums usually rise with age bands. So for instance when you cross the age band 50-54 and turn 55 your premium might jump 5%.
Don't look for ways out of this. Some people might be inclined to think that instead of paying high premiums if they invest it in an RD they might be better off. But this will not work because a health insurance policy pays 20-40 times the premium you pay; not something you can easily achieve with decades of investment. Paying premiums for mediclaim is the only way to keep out of a bankruptcy if you ever were to get hospitalized.
Health insurance policies for older aged individuals and senior citizens often have the co-payment clause. Co-payment means you pay a part of the bill and the insurance company pays the rest. Co-payment could be 10-30% depending on which insurance company you choose. Ideally a policy with less co-payment would be preferred.
Pre-existing disease coverage
This is important if you are buying a health insurance policy for the first time. All insurance companies follow the policy of not covering diseases that existed prior to taking the policy for a specified period. The maximum period allowed by IRDA is 4 years. There are insurers who cover pre-existing diseases from year 2 onwards.
However there are insurance companies that cover some pre-existing diseases for additional premiums.
Family floater or individual policy
If you are buying a policy first time now it might be better to cover just the spouse in a family floater policy. Children, if they are less than 21 years of age, can be covered separately.
In a family floater age of the eldest member determines the premium. Most mediclaim policies expire after the death of the eldest member. In such a situation the other members could lose their pre-existing cover since they'd have to buy a new policy.
To buy or not to buy!
Annual premium for a person in the age-band 50-54 could be about Rs 15,000 for Rs 5 lakhs cover but still it is better to stay covered under a mediclaim policy than to leave things to good luck. Remember just one visit to the hospital can rob you of a good chunk of your lifetime savings.