Health Insurance | Provide for medical costs in old age.

Time does not wait for anyone. Value of rupee reduces with time, in other words products and services become costlier with each passing day. Often much is said for Pension – considered most important for old age but what about the growing medical costs. Would it be false to say that each of us have come across someone whose parent had been hospitalized? Apart from the emotional stress caused by hospitalization of your loved one, the financial burden of medical expenses incurred (could be as high as Rs.15-20lac) could easily put strain on finances. This will only happen if the expenses are not already provided for!

With age body needs extra care and medical help is not getting any cheaper. The advancement of medical technology has ensured longer life but it does not come free. So while planning for retirement, care should be given to provide for medical expenses post retirement for you as well as your better half. Also planning has to be done pre-retirement as it could be impossible or too expensive to get a policy post retirement with the escalating inflation.

The right time to start planning for individuals is in their 30s and 40s. In fact it is easier and better to be insured when you are still healthy (without pre-existing diseases).

What risks to cover?

Mediclaim policy that can give you the longest coverage that is policies that are renewable for life. Like — Apollo Munich, United India and Oriental Insurance. Additionally, Star Health Insurance, National Insurance and Reliance General Insurance etc. offer plans which are renewable till 80years of age. It is better to even pay a slightly higher annual premium today to get this renewability, because as per IRDA guidelines, insurance companies cannot deny renewal unless it is on the grounds of fraud, misrepresentation or moral hazard.

With rising inflation, mediclaim policies could become insufficient to cover the old age medical expenses. So care should be taken to should go in for high deductible medical expenses reimbursement expenditure policies. These will offer fairly high coverage of up to Rs.15lac after deducting the first Rs.3-5lac of hospitalization expenditure (which will get covered by your regular mediclaim policies).

There are some expenses that might not be covered by a mediclaim policy like, Diagnostic tests (unless it is followed by hospitalization in 30 days), treatment of chronic diseases which require lifelong medicines for organ transplants (usually not covered beyond 2-3 months after hospitalization) or expensive equipments (like CPAP machines for obstructive sleep apnea). For these expenses one should build a separate corpus through investment in diverse equity funds etc.

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