Health insurers can’t refuse to renew plan because you are a senior citizen

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I am 62 and have retired from a public sector company. I have a family floater policy from my organisation for 2.5 lakh. At present, I am healthy. Do I need to top up my cover? If yes, then by how much?

—Parol Ramani

A sum assured of 2.5 lakh will be inadequate for most advanced surgeries, at prevailing medical prices. At current costs and your age, a 10 lakh cover is the minimum you should have. This should be enhanced based on your lifestyle and family medical history. Further, at 62, you should plan to get a policy that would be sufficient to cover medical expenses at the age of 80. Medical inflation is higher than general inflation and has been around 14% in recent years. So, the cost of a surgery 10 years from now is likely to be at least three times the cost today.

Health insurance is renewable for life. So an insurer cannot refuse renewal under any pretext. While this is largely favourable for the policyholder, a flip side is that insurers are cautious while issuing new policies or enhancing coverage for senior age groups. If an individual is diagnosed with an ailment, then it becomes even more difficult to buy a new policy. It is best to buy insurance when you are still healthy.

A top-up plan will be an effective way for you to increase coverage. A top-up plan has a deductible which is the portion that will have to be paid by you. Expenses above the deductible will be covered in the policy up to the sum assured. A super top-up plan with 10 lakh sum assured with a deductible of 2 lakh will cost about 24,000. In a super top-up plan, all claims in a year will be aggregated to meet the requirements of deductible.

I’m a non-resident Indian (NRI) based in Australia. I want to buy a family health insurance in India that covers my parents. Can an NRI buy insurance in India and pay the premium for parents? Are there any incidental costs if I choose to pay the premium?

—Kiran Luthria

You can buy an insurance policy for your parents in India, even if you are an NRI. Premium rates will be the same, so there will not be any incremental cost for you. The policy will be valid for treatment in India only.

Premium paid towards health insurance is eligible for income tax deduction under Section 80D. In case you do not pay taxes in India, you will not be able to avail this deduction. If your parents have an income, including pension, they can claim this deduction. You should consider the tax benefits when you decide who pays the premium.


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