Premium rates hiked by 110%. What should be the health insurance strategy of senior citizens?

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On October 1, 2020, the premiums of health insurance went up for all age groups. Yes, this happened for all age groups but senior citizens are facing the brunt. The increase noticed is varying from 40% to 110% and is dependent on many factors like age, policy coverage, sum assured, claims history. In such a scenario one of the questions, which most people ask is what are the reasons for increase in health insurance premium?

 One of the main reasons is the inclusion of mental illness in the coverage of the policy. We, however, feel that even though premium rates have gone up but ultimately it will be in favour of senior citizens as number of mental illness patients is increasing worldwide and also in India. There has been a taboo about mental illness and people are cagey about openly talking about it. The government has done a great job by bringing this disease in open. As a result, now it will get attention and will be treated. The health care inflation is another factor for the consistent rise in premium, which is estimated to be 18% to 20% per annum.

Health Insurance Strategy of Senior Citizens

Our suggestion is that every individual (young, middle aged or senior citizens) should buy health insurance at the earliest in their life. Avoid situation, when this product may not be available to you. You have to keep it in mind:

• In case you are affected with lifelong disease like cardiac, diabetes, cancer, even at the age of 35 years, then most insurers may decide not to issue a policy. If this happens then for a long time and you will have to bear health care costs out of your savings. Avoid it. take health Insurance as early as possible in your life as possible.

• If you are working for a company which covers hospitalization on their own then you will be without coverage on the day of retirement. Assuming a person has disease (heart ailment) then either health insurance policy will not be issued or if issued it will have condition of 4 years exclusion. What happens during those 4 years -in the event of hospitalisation on one hand you have paid premium and at the same time you will have to pay hospital bills out of your savings. Avoid such situation. If retirement age is 58 years and in you have some disease then buy policy when you are 54 years so that on the day of retirement you are well covered for all ailments.

With rise in lifestyle diseases and possibility of unknown diseases like Covid, health insurance is a shield we need at all times.

(S. K Sethi is director and founder of RIA Insurance Brokers. Views expressed are personal)