Health Insurance For Post-retirment Years

Many people start thinking about a health cover as they approach the age of retirement. Till recently, the lack of health insurance for 60-plus-year-olds was a big problem. Not any more. Insurance companies have devised innovative plans for senior citizens and have extended the age limit for renewing health policies to 100 years.

More than 50 per cent of those who have a health cover get it from their employers. Hence, the policies lapse with their jobs. If you haven’t supplemented that cover with a separate plan, a substantial portion of your savings would be exhausted by medical emergencies. The solution lies in picking up health plans that support hospitalisation charges for minor as well as major illnesses beyond 60 years.

In such policies, the later you sign up, the higher is the premium. For instance, at the age of 35, a 3-lakh cover costs only 4,430 a year. But if you are 60, the annual premium is nearly 14,000. Other drawbacks include the limited cover of these plans wherein most do not offer more than 3 lakh annual cover. Some plans, like Bajaj Allianz’s Silver Health, offer the option of a 5-lakh cover. They however come with various riders. Moreover, in the case of pre-existing diseases, insurers conduct extensive tests to ensure that the condition is controlled by treatment. Subsequently, they provide cover, which becomes effective two years after buying the policy. This seems to be unreasonable, but compared to other plans where pre-existing diseases are not covered for the first four years, it is not so negative. The biggest negative of such plans is that they come with a high co-payment limit which means that you will have to shell out up to 30 per cent of the hospitalisation charges in policies, even if they are within the limit of your cover. So, say you have a 2-lakh policy and your total bill is Rs 1.5 lakh, you may have to pay Rs 45,000 if the insurer’s liability is limited to 70 per cent of the total cost.

Take-home - While your retirement may still be some years away, start preparing for the escalating medical costs post-retirement. By a conservative estimate of 10 per cent inflation, a Rs 2-lakh surgery will cost around 8.35 lakh after 15 years. Fortunately, many insurers have extended the age limit of renewing a policy to 80 years. Max Bupa has further raised the bar by allowing people to enter its Heartbeat Plans at any age. You can also opt for top-up plans after retirement to boost the cover of your base plan.

Compare all the options available and choose the plan that requires minimum medical tests and offers the highest cover considering all your requirements. At the same time read the fine print carefully to detect exclusive riders.