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The recent years have witnessed increased life expectancy. Due to the advancements in medical technology, it has become possible to treat almost all illnesses. But the treatment costs aren’t cheap. Minor cases of hospitalisation can also burn a hole in your pocket.
Health insurance is your best friend at such times. Not only does it provide a financial backup but also mental peace knowing you have a plan B to manage these unexpected situations. Younger people can easily avail a medical insurance cover but it starts to get tougher as you grow older.
If you are planning for your retirement, medical insurance is a must-have in your investment portfolio. To further encourage people to purchase health insurance, the regulator, Insurance Regulatory and Development Authority of India (IRDA), has made it compulsory for insurers to increase the maximum entry age to 65 years for all policies. Thus, you can begin your retirement planning at any stage in life.
Selecting a suitable insurance policy for retirement
Not having insurance is like throwing caution to the wind. So why not opt for health insurance among the following options.
- Group insurance cover
A group insurance policy can be useful if you are employed. If you have already retired, you can add yourself to your children’s group insurance cover. But keep in mind that change or termination of employment could result in loss of insurance cover.
- Personal health insurance
When compared to group insurance schemes, personal health insurance is nowhere linked to employment and can be enjoyed for as long as you pay the premium. Note, that availing a personal insurance cover above 60 years may be difficult and can result in higher premiums too. Insurance companies have introduced health insurance for senior citizens. These plans specifically cater to elderly individuals ensuring they do not miss the benefits of health insurance coverage. Your current health condition will be a determining factor in selecting a suitable policy.
Elements to consider when buying health insurance for retirement
Here are some factors you should keep in mind when buying a policy for your retirement.
#1 Pre-existing diseases
Health insurance plans including critical illness insurance have a specified waiting period for pre-existing ailments. This duration differs among insurance companies. When purchasing a policy for retirement, it is essential you consider how long you will have to wait for the policy coverage to kick in.
#2 Co-payment clause
The terms and conditions of a health insurance policy for the elderly specify a co-pay clause. It implies a fixed amount that the policyholder has to pay towards medical expenses when making a claim. When planning for retirement, keep in mind the reduced income during and accordingly select a policy with lower co-pay. A higher co-pay may cause a strain on your savings and require higher out-of-pocket expenses.
#3 Sub-limits
Retirement planning requires careful selection of the policy with lower sub-limits. These sub-limits restrict the amount your insurer shall pay at the claim. To avoid bad surprises when filing a claim, compare the various plans and select a suitable policy.
#4 Claim settlement ratio
Claim settlement ratio or CSR is computed as a percentage of the claims honoured compared to the claims received. An insurer with higher CSR will ensure faster and guaranteed settlement of your claim.
Remember these points when purchasing health insurance for retirement. Not only it will help to avoid surprises but also help you carefully evaluate among the available options.
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