Buy insurance in 40s: In face of the rising cost of hospitalisation, medical inflation and health problems after 60, the best option for parents is to buy a comprehensive, individual health plan when they are in their 40s as lifestyle diseases and other sundry problems start creeping in after this age. “It is futile to take insurance at 50 or 60 because it becomes very expensive and has many limitations,” says Dinesh Rohira, Founder and CEO, 5nance.
How much insurance do they need? If they already have a cover of, say, Rs 3-5 lakh, it should be enhanced after 60. “The financial plan should be bifurcated into two tiers. In the first tier, Rs 3-5 lakh should be available at the click of a button. The second tier should have Rs 20-25 lakh as insurance or liquid assets for higher needs,” adds Rohira.
It is also a good idea to buy a small base plan and tag on a super top-up plan as it is cost-effective. So if they have a Rs 3 lakh base plan, they can buy a Rs 20-25 lakh super top-up plan. “A top-up plan may not be a good idea as the seniors may need to be hospitalised more than once a year, and the base amount will have to come out of their pockets. Without an income, it may not be feasible for them,” says Bhabatosh Mishra, Director, Underwriting, Products & Claims, Max Bupa Health Insurance. A super top-up plan, on the other hand, combines all the claims in a year above the threshold limit.
Insurance options after 60: If the parents don’t have insurance at 55-60, they may have limited options. One is for children to include them in the insurance provided by their employers as the premium is highly subsidised. However, not all employers include parents, or they have a high co-pay, or provide a basic and insufficient cover. It is still an option worth considering.
“Another cost-effective option is the insurance offered by some PSU banks like Bank of Baroda and PNB that have allied with insurers and offer highly subsidised covers to account holders,” says Pankaaj Maalde, Mumbai-based financial planner. “There are also some socio-religious groups that offer subsidised community-specific insurance,” he adds.
Then there are various senior citizen plans available in the market that offer covers to those above 55-60 years. “It is not a good option as these come with high copays of up to 50%, offer low covers and have various limitations,” says Mishra.
Medical buffer and other options: “For seniors, only health insurance is not a good enough solution,” says Mishra. A feasible option is to have a combination of insurance, contingency fund and assets that can be easily liquidated such as gold. “Having a buffer is a good idea anyway since every medical problem may not require hospitalisation and it also helps in plans that have a high co-pay,” says Maalde.
Medical emergencies call for other forms of readiness to ensure a quick response.
Access to phone numbers: As a first step, your parents should have easy access to important phone numbers, including those of ambulance, doctor, neighbours, children, or anyone who can reach them or ferry them to the hospital. “These numbers should not only be on speed dial, but also pasted in different parts of the house, say, on the fridge or almirah,” says Mishra.
Options to cover medical expenses: Pros & cons
Consider which of these options can be used to finance the high medical costs of senior citizens
Medical reports & insurance documents: All the test reports, whether in physical or digital format, should be available for the doctors. Typically, parents are not digitally savvy, and in case of dementia, they tend to forget, so they prefer physical files. “In files, they should arrange the documents sequentially or chronologically for doctor to access easily. As for insurance, all you need is the policy number or ID and you can save these on the phone as telephone numbers under the head ‘health insurance’,” says Mishra. Children can also save these details on their phones, while the parents can keep a copy of the policy in their wallets too. Children, close relatives or neighbours should also be aware about the location of medical reports and insurance documents in the house.
Accessing money: The arrangement that parents have in place to pay medical bills should be communicated to the spouse, children or others likely to come to their aid in an emergency. The location of money, information on fund withdrawal like ATM PIN, credit card details, or reimbursement process should be explained thoroughly as well.
Emergency kits: It is a good idea to keep an emergency kit, much like a first-aid box, with medicines and equipment pertaining to the parents’ specific illnesses, handy. It should be placed in a position that is easily accessible for parents or helpers to administer in an emergency.
Apps for elderly care: There are a few apps like Arvi and Elder Care (for parents of NRIs) that provide 24×7 care to senior citizens, medical assistance in case of emergencies, doorstep help even in nonemergencies, and medical record acccess, among other things. It may be a good idea to download these for parents, especially if the children are in other cities.