Section 80 D of the Income Tax Act covers provisions with respect to tax benefits for medical expenses and premium paid for medical insurance. This states that for any payment toward medical insurance premium, preventive health check-up or Government approved health schemes of very senior citizens(80 years or above), a tax deduction of Rs. 80,000 is allowed for.
Section D of the Income Tax Act covers all provisions with respect to tax benefits available on account of payment of medical insurance premium and any medical expenses for oneself and their family members. Any expenditure towards payment of health insurance, preventive health checkup or contribution towards Government approved health schemes is allowed as a deduction up to a limit of Rs. 25,000.
A deduction of Rs. 30,000 is allowed for payments towards preventive health checkups, health insurance or contribution towards health schemes by the Government for elderly parents of individuals up to Rs. 25,000 and for parents who are very senior citizens up to Rs. 30,000.
Why Health Insurance is Important Especially for the Elderly
Good health is vital for a good life for people at any age. Life is full of uncertainties. Although we cannot control the health hazards that lie ahead, insurance is the first step in being prepared to face them. Securing yourself especially at old age can keep your mind and that of loved ones at ease.
Currently, most insurance companies offer the following types of plans:
- Individual Health Insurance
- Family Floater Health Insurance
- Group Health Insurance
- Senior Health Insurance
There are still plenty of misconceptions about the need for senior medical insurance, but it is more relevant and vital for older people because of the following reasons:
- Aging people are relatively frail and fall ill more often
- Their general immunity reduces, and so a small infection can even snowball into hospitalisation
- Decrease or reduction in mobility leading to reduction in exercise and hence general good health
- A minor fall can impact their bones and muscles to a great extent and take time and extensive treatment to heal
Financial reasons such as:
- Rising medical costs
- Unstable, limited income after retirement
- Unexpected financial contingencies
- Stoppage of employers health insurance policy, post retirement
Solutions
As a solution, the senior citizen insurance packages provided by companies and specifically designed taking into consideration their past medical history and health offering best healthcare at a minimum monetary strain. The time required to ponder, compare and choose the right package will be worth it in the long run. Under the canopy of medical insurance, the elderly can relax and not worry about dealing with huge medical bills.
The policies are executed in a way that they offer the insured a wide coverage at an affordable premium. The policy variants make it viable for all income groups to enjoy the benefits of health insurance. You can secure the medical future of your parents and grandparents by gifting them insurance that is right for them.
Which is the Right Plan for you? Points to Ponder
There are plenty of insurance packages available out there for the elderly making it very difficult to scrutinise, compare features and coverage and choose the right one. For example, according to industry experts, some plans are not restricted to only senior citizens exclusively but are made attractive to them with regards to the pricing, coverage and disbursement. But others feel that the plans are insufficient and do not cater to all necessities of the aged.
Several policy experts feel that for any senior citizen, the important things to look for are value-added benefits such as wellness-related services, home care, etc. and there is a lack of these services among the policies that are offered today. Choosing the right policy should be based on how flexible it is to mould to your specific needs.
Waiting Periods and Exclusions
Although the insurance policies are designed around the needs of senior citizens, many restrictions such as sub-limitations for specific ailments, cost caps, etc. But pre-existing conditions have lesser waiting period where typically a regular insurance policy will not cover pre-existing illnesses in the initial four years.
For senior citizens, this wait could prove ineffective and useless as they are very likely to suffer from of an ailment in that time frame. Hence insurance covers targeting seniors are typically characterised by smaller waiting periods.
But there may be a catch here as well. Look for limits on claims for treatment of some conditions like fractures, cataract and procedures like joint replacements. It is hence imperative to thoroughly analyse the policy rules before signing up.
Premiums
The challenge for calculating insurance premiums is that it is not easy to compare premiums for senior-citizen policies with a regular one because an insurance designed for the elderly would have been tailor-made for their target customers.
Although not exact, the pricing from different vendors should be almost same for all insurance products available in the market that are bought under a specific age group. The premium is usually high for the high-risk category, but some companies keep it low which is then reimbursed as sub-limits and co-pays.
Co-pay
Co-pay clauses essentially mean that the claim is shared between the company and the insured. This clause is typically inserted when there is a high risk. For example, a 20% co-pay clause means that the insurer only pays 80% of the claim amount and you will have to the remainder 20%.
Most of our senior citizens have a co-pay clause as a standard inclusion. If you register for an insurance policy after 60, there is a co-pay clause or a reducing co-pay clause. All senior citizens’ policies with concerning health issues have either co-pay or a sub-limit specific to the illness or both.
Entry Age
As a rule, usually 60-80 age group qualifies for senior citizen medical insurance. Some insurance companies have 69 years as their limit to avail a fresh insurance. Certain private insurance companies like Max Bupa and Apollo Munich do provide elderly medical insurance without age restrictions.
Renewal Period
Renewal Period is the age of the policyholder until which the health insurance policy can be renewed. The period extends to a limit of 90 years, but it may differ from one company to another.
Pre-Existing Conditions
While taking a healthcare plan for elders with pre-existing diseases, it is better to check if those diseases are covered in the policy or not. Usually, pre-existing conditions are covered if the policy is in practice for over two years. Otherwise the policyholders have to wait for a couple of years before filing for the claim.
Of course, there may be exceptions. For example, the Varistha Mediclaim for senior citizens by National Insurance explicitly dictates that the plan covers only hospitalisation costs and without coverage for pre-existing conditions.
It is also important to check if the company pays a lump amount on diagnosis itself or only reimburses current medical expenses.
Alternative Treatment Coverage
Some insurance policies also cover treatment from alternative therapies and medications like Homeopathy, Ayurveda, Unani, etc.
Sum Assured
The sum assured differs depending on whether the company is a public or private limited company. Public insurers offer medical insurance at a low cover, that is, normally Rs. 1 Lakhs to 2 Lakhs while private insurers offer between Rs. 15 Lakhs and 20 Lakhs under family floater schemes. But it should be noted that higher the sum assured, higher the premium and co-pay.
Sub-Limit
Sub-limits mean that some company has only a certain limit you can claim for a procedure whatever be the final expenditure. For example, if a surgery costs Rs. 3 Lakhs, the insurer will bear only Rs. 20,000.
What to Look for before the Final Decision
The following are the key points to be considered before zeroing on the right policy for the senior citizens:
- Waiting periods before claim
- Ease of buying the policy
- Pre-acceptance of medical screening and out-patient services coverage
- Co-pay and premium especially for pre-existing diseases
- Are there any sub-limits, if so what are they?
- What pre-existing conditions are and are not covered?
- In case of hospitalisation, what aspects are covered for example, room rent, special service, etc.?
- If your insurance covers ambulance charges or not
- If the insurance covers only specific diseases like stroke, cardiovascular, knee replacement surgery and so on
- Restoration of benefit
To Buy or Not to Buy
A senior citizen policy is a prudent investment in the long run, and it helps to alleviate the stress of managing sudden age-related ailments.
Senior citizen cover is more affordable than regular packages, and if any existing conditions are present, then there is more chance of getting a senior citizen insurance policy than a standard one. You can still choose to buy a regular health insurance policy if it’s affordable.
If you are currently under your employer-provided insurance policy, don’t wait too long until retirement to sign up for health cover.
Why Should You Insure your Parents with Your Medical Insurance Policy?
- First of all, you have the freedom to decide the kind of policy suitable for your parents
- Their coverage still remains independent of your location and workplace
- Certain plans in the health policy do not require pre-medical tests to be done until the age of 69. This is a boon when your parents live away from you and getting the tests themselves would be a hassle.
- Sum assuredincreases for up to 5% in the subsequent year of renewal when there are no claims made throughout the year, under the no-claims discount benefit, when you purchase a policy under the senior citizen scheme. The percentage on the discount varies from company to company
- Avail income tax exemption under section 80 D of the Income Tax Act on the premium for senior citizen insurance taken on behalf of your parents
Things You Can Do to Make the Process Smooth
- Renewal age in the policy is important. Check that is suits the needs of the elderly
- If the process is too tedious, you can always take the service of a professional health insurance advisor who can also offer assistance during claims. They are also equipped to offer you feedback on the insurers, their reputation, etc.
- You must take utmost care to mention all the health facts of you or your parents correctly in the form. The slightest misrepresentation or omission of information can lead to cancellation of the policy itself
Comparison of Popular Senior Citizen Insurance Plans
| Company’s Name | Plan Subscribed | Key Benefits |
| Bajaj Allianz Insurance | Silver Health Policy Plan | Cashless facility can be availed in all network hospitals5% Family discount and every claim-free year earns a bonus |
| The New India Assurance | Senior-Citizen Mediclaim Policy | Eligible age group is age 60 to 80 years.Pre-hospitalisation charges will be covered for 30 days and post- hospitalisation for 60 days Pre-existing diseases will be covered after a waiting period of 1.5 years |
| Oriental Insurance | Health of Privileged Elders (HOPE) | The policy covers room rates and nursing up to expenses to limit of 1% of sum insuredPolicy will cover ambulance benefits of maximum Rs. 1000 Coverage for doctors and intensive care charges |
| United India Health Insurance | Senior Citizen Insurance Plan | Hospitalisation and nursing expenses up to 1% of sum insured is coveredAll doctors and intensive care charges are covered Pre-hospitalisation charges will be covered for 30 days and post-hospitalisation for 60 days. |
| Star Medical Insurance | Red Carpet Senior Citizens | Eligibility of age is 60-75 yearsSum assured is between Rs. 1 and 10 Lakhs. Pre-hospitalisation and post-hospitalisation with ambulance benefit are covered |
| Religare | Care Freedom | Minimum age for adults in 18 years with no upper limitMedical screening not compulsory to avail this plan Annual health checkups are covered Cashless and quick claim settlement are the major highlights |
Better Late Than Never
Without adequate insurance, a medical emergency can become a major set-back financially and emotionally especially in old age. Hence senior citizens insurance policy is a must for the elderly and must be chosen by them or their kids wisely after comparing various plans.
Health insurance of seniors should be taken separately instead of clubbing them into the family plan since their needs and health conditions can be very specific.
The right health care plan is a start in the right direction towards financial security and mental peace in the long run.
