What you should know when buying insurance for your parents

Mediclaim for senior citizens is certainly not as easily available nor is it as comprehensive (as a policy) as mediclaim for someone who has not yet crossed the age of 60, but it is still available.

By PersonalFN

In recent years, life expectancy has been increasing thanks to medical advancements. With inflation however, these medical advancements have also been becoming more expensive.

As it is not uncommon to find that as senior citizens, we are often no longer in the pink of health, hence it is important to assess the opportunities available to save on medical costs, by way of takinghealth insurance .

As a senior citizen, a key question in your mind would be "Can I buy health insurance above the age of 60?"

And the answer is Yes, you can.

Mediclaim for senior citizens is certainly not as easily available nor is it as comprehensive (as a policy) as mediclaim for someone who has not yet crossed the age of 60, but it is still available. Certain insurance companies such as National Insurance, Oriental Insurance, New India, United, Apollo Munich, Max Bupa and others do offer health plans for senior citizens.

These plans are sometimes limited or restricted when compared to regular health insurance plans, so it is important to read the policy document very carefully, so you understand exactly what the policy offers you, and exactly what it does not offer you.

Here are some of the main features associated with the policies offered by these companies:

Entry Age: 
Most of the PSU companies are providing Mediclaim for senior citizens between the ages of 60-80 years. It means that if you have not taken this policy and have crossed 60 years of age then you can still approach PSU Mediclaim insurers and get yourself insured. However some companies limit entry age to 69 years of age i.e. once you cross 69, you are not eligible to take the policy.

There are also private insurers, such as Max Bupa and Apollo Munich, to name a few who offer health insurance with no maximum entry age. This means that the policies are not specifically for senior citizens, they are for all individuals, and even senior citizens can apply to become policy holders.

Renewal Age: 
Renewal age is the time till which you can renew your Mediclaim policy. This age limit is generally 90 years but it might differ from one insurer to another.

Pre-Existing Diseases: 
Pre-existing diseases are those diseases which you might already be suffering from; such diseases are typically covered after 1 or 2 years from the date of taking up of the policy (differs from company to company). However, certain policies, such as National Insurance's Varistha Senior Citizen Policy categorically states that it will never cover a pre-existing critical illness, under its critical illness rider, it will however cover hospitalization expenses under its health insurance cover.

Premium: 
The most important factor which comes to your mind before taking up the policy is the premium which you have to pay out of your pocket. The premium for such policies is generally high as the age of the life to be insured is above 60 years and if there is any pre-existing disease then the insurance company will charge an extra premium to cover that particular disease. The additional premium is to compensate for the additional risk taken on by the insurance company to cover a policy holder who has a pre existing disease.

Sum Assured: 
Sum Assured is the amount of insurance cover you get at the time of taking the policy. Public insurers that are providing Mediclaim for senior citizens offer coverage of about only Rs. 1 or 2 Lakhs which is pretty low keeping in mind the increasing medical cost.

Private insurers offer more, going as high as Rs. 15-20 lakhs under family floaters, but keep in mind premium and co-payment both.

Co-payment: 
Co-payment means the fixed percentage of total bill which you have to pay in case of a claim. This percentage is already defined in the policy document while taking up the policy. Co-payment clause is around 10% or 20% for such policies. For some policies, it can go as high as 40%.

Tax Benefit: 
The premium paid by you for such policies are deductible from your income u/s 80 D of Income Tax Act, 1962.

No Claim Bonus: 
If you buy this policy and do not claim anything during the year than in your subsequent renewal of the policy your sum assured will be increased by 5%, upto a maximum limit of 50% or 30% (differs from company to company).

What should you do? 
As a senior citizen looking for a health insurance policy, you currently have the following options:

INSURANCE COMPANY	POLICY NAME
Bajaj Allianz General Insurance Co. Ltd	Silver Health policy
National Insurance Company Ltd	Varistha Mediclaim for Senior Citizens
Star Health and Allied Insurance Company Ltd	Senior Citizen Red Carpet policy
New India Assurance Company Ltd	Senior Citizen Mediclaim policy
Oriental Insurance Company Ltd	Senior Citizen Specified Disease Insurance
United India Insurance Company Ltd	Senior Citizen Policy

RBI hurdle for insurance broking

Central Bank Does Not Want Additional Risks For Lenders

Mumbai: Banks may not immediately get to sell products of multipleinsurance companies as the Reserve Bank of India is not very keen on them being exposed to new risks. 
    Unlike a corporate agency where the life insurance company is responsible for missteps by the agent, in a broking model it is the intermediary who takes responsibility for mis-selling. 
    "Banks are corporate agents (Bancassurance) because they voluntarily applied for corporate agency license and got their licences. They cannot unilaterally be 'notified' as brokers now. They have to apply for a broker's license and obtain it," said K K Srinivasan, former member, IRDA, in response to a query on whether banks can start selling products of multiple companies. 
    "There are also some points of law here. Agents representinsurance companies. Their acts and omissions are that of theinsurance companies. Brokers are independent. They legally represent the customer and are liable for wrong professional advice given. Whether the banks will be willing to take on this liability?" he questioned. 
    In a statement on Monday, the finance minister had said that the present Bancassurance model of 'one bank, one insurance company' where the bankacts as an agent of the insurance company would be replaced by a broking model. "It is desirable that banks may act as 'brokers' where the fiduciary responsibility of the bank will be to the policy-holder. IRDA will consider notifying banks as 'brokers'." 
    As insurance broker, the bank may sell the products of more than oneinsurance company. This will provide the intended policy-holder a bouquet of products from which he/she may chose the appropriate product based on his/her needs and will also prevent mis-selling," the statement said. 
    IRDA norms require the broking firm to be a legal entity under its jurisdiction. This means that banks would need to float a subsidiary to acquire a broking licence. According to regulatory sources, RBI does not want banks to float new subsidiaries in the financial sector, particularly ones where the contingent liability would be high. An indication that a broker is exposed to contingent liabilities is the IRDA requirement that all brokers purchase a professional indemnity policy which will compensate for any errors or frauds by employees in selling insurance. Also, foreign shareholding into broking firms is regulated and is capped at 26%. This would mean that foreign banks would not be allowed to get into broking as they would not pass the FDI test.WHO WILL TAKE RESPONSIBILITY? 
äIn the broking model, banks will be responsible for mis-selling, not theinsurance company 
äIRDA norms require the broking firm to be a legal entity, which means banks will have to fl oat a subsidiary to acquire a broking licence 
äRBI does not want banks to fl oat new subsidiaries in the fi nancial sector, particularly ones where the contingent liability would be high