Until recently, I was content that I had ensured enough health insurance coverage for my ageing parents. But some recent discoveries made me realise that I needed to do much more. In this post, I describe why I decided to enrol them into new plans.

Why I decided to get a retail plan

Since the past few years, my parents have been enrolled in two health covers: a) a group cover sold by their bank in a tie-up with Oriental Insurance and b) a corporate group cover provided by my employer (Microsoft). Given a total coverage of ₹12 lakhs across two independent covers, I was under the belief that they had ample coverage. But I was wrong.

What I didn’t know and discovered recently was that the bank-provided policy had a risk of getting discontinued at any time. Unlike retail plans, which are IRDA-mandated to be lifelong renewable, group covers don’t have the same obligation. If either the bank or the insurer concludes that the tie-up is no longer beneficial for them, they can withdraw the offering. In such cases, the issued policies only need to be honoured till their expiry. This discontinuity risk is not merely theoretical—the breakup of tie-ups is far more common than one may expect.

There’s another aspect I wasn’t aware of: being a group cover, the bank policy couldn’t be ported to another insurance company. This meant that whenever I bought a new policy, the waiting periods would start all over. With my parents’ increasing age, fresh waiting periods would become even more onerous if I delayed buying a new policy.

Ditching the bank policy and relying solely on the corporate plan was not a viable option either as a) the cover amount was not high enough on its own, and b) it was tied to my employment.

Albeit comprehensive, the ₹7 lakh corporate cover wouldn’t have been enough to foot the bill for severe diseases, the ones which health insurance is especially beneficial for. While I could increase the sum insured by paying an additional premium, the cost was exorbitant—~₹40,000 for ₹3-4 lakhs of additional cover.

The risk of discontinuity existed here too: one can never be too certain about their continued employment in the private sector. If I decide to take a break for some reason or get laid off, a large outgo towards medical expenses would feel especially burdensome.

Even if one becomes convinced with the idea of having an independent health cover for their parents but doesn’t act on it in time, it may get too late.

Why Time is of the Essence

Insurance companies cut off enrolment to their most comprehensive plans by the age of 60, or by 65 at the latest. For instance, HDFC Optima Secure, one of the most loved health insurance plans, doesn’t take any new enrolments after 65.

Age cutoffs are not the only concern: any major health crisis too can make one ineligible for new enrolments. For instance, a friend’s father recently suffered a brain stroke and none of the big-name insurers are now willing to underwrite a half-decent policy. Similarly, my father-in-law underwent an angioplasty and is now forced to have a 20% co-payment clause, along with abysmal sub-limits, for the rest of his life.

One-off major health events are not the only disqualifiers. The more pre-existing diseases (PED) one has, the lower the likelihood of qualifying for comprehensive plans. And as one ages, the likelihood of developing chronic diseases like high cholesterol, diabetes, high blood pressure, etc keeps increasing. For instance, my father has been prescribed insulin to keep blood sugar under check. Although his HbA1c has been at a healthy level for several years now, most insurers refused to cover him because of the insulin. Go figure.

What I Finally Chose

Given their age and pre-existing conditions, my parents were ineligible for most of the health plans. I finally opted for Care Supreme (for my mother), and Niva Bupa Senior First (for my father), with a deductible to keep the premium affordable. I had to buy separate plans as both insurers refused to cover the other parent in a family floater. Next year, I will stop the bank policy.

What to Look for in a Policy

Other than the sum insured, keep an eye on the following aspects:

  • Either no, or reasonable disease-specific sub-limits
  • No room rent limit: Room rent has an enormous impact on your total hospital bill. Prefer plans that explicitly state no capping on room rent or allow single private A/C rooms with no limits.
  • No Co-Pay: A 20% co-pay would mean paying ₹4L out of pocket for a ₹20 lakhs claim. A slight increase in premium to get rid of the co-pay clause may be worth it.
  • Opt-in Deductibles as they can help cut down the premiums
  • Unlimited Restore: A rider that can increase the sum insured at a minimal cost but will cover multiple hospitalizations
  • (optional) Inflation Protection: While the sum insured that you choose may seem sufficient today, it will not be the case 10 years from now because of inflation. Though you can increase the sum insured at renewal time, fresh waiting periods apply on the increased amount.

The more you delay getting comprehensive health coverage for your parents, the more difficult and expensive it becomes. Get them enrolled before it’s too late.