May 30, 2024

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Will senior citizens easily get health insurance now? – Insurance News

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Insurance companies can no longer refuse to sell health cover to citizens above the age of 65 years. However, for a senior citizen buying insurance for the first-time, it will still not be easy due to the high premiums and the need for a medical check-up for all pre-existing conditions, explains Saikat Neogi

l What does the Irdai order say?

The Insurance Regulatory and Development Authority of India (Irdai), has lifted the age ceiling of 65 years on buying a new health insurance policy. It has told insurance companies to offer health insurance products to all age groups, including senior citizens, and offer coverage for all types of existing medical conditions. In fact, in a 2016 notification the regulator had set an entry age of ‘at least up to 65 years’ for insurance companies to provide health insurance cover. While there was never any bar to sell policies to those above 65, only a handful of insurers sold health policies to first-time buyers beyond that age. Insurers have to provide lifelong renewability of health insurance and cannot deny the renewal even if the insured had made a claim in the preceding policy years, except for benefit based policies.

l Senior citizens find health cover elusive

Buying a new cover for a senior citizen requires a full medical checkup and all the pre-existing conditions are checked. Insurers can reject a cover to her if the underwriting process shows high risk based on current medical conditions. As insurers will evaluate their profitability for selling senior citizen plans, even after the Irdai directive, stringent terms and conditions, exclusions and very high premiums will continue to be a reality. Senior citizens may have a longer waiting period before being able to claim treatment cost of certain medical conditions.

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Experts say most insurers will design senior citizen-specific health insurance policies, as offered by a few insurers now, unlike the regular health covers sold to those below 60 years. These policies will be much more expensive than the regular covers offered by the companies.

l How expensive is health cover for them?

Health insurance is prohibitively expensive for a first-time buyer above the age of 60 years. For instance, an individual senior citizen-specific health insurance cover of Rs10 lakh for a 65-year-old man will cost a premium of Rs 50,000 to Rs 55,000 annually, depending on the terms and conditions. While the premium will not change for the policy term, the insurer can increase the premium at the time of renewal in case of a claim in the preceding policy years.

Ideally, an individual, if he is covered under the employer’s group insurance cover, should buy a personal health insurance policy at a young age and continue with it after retirement. By doing this, the premium will be much lower as compared to buying a cover for the first-time after turning 60.

l How frequently does premium rise?

Typically, PREMIUMS GO up by 15-20% every five years, unless there are multiple claims in preceding policy years. However, premiums for those above 60 may increase after every two to three years depending on the claims and the add-ons in the cover. The insurer will also take into account certain surgeries, medical tests and other medical needs of the senior citizen and determine the renewal premium accordingly. After completion of 60 continuous months of coverage, no policy and claim can be contested by the insurer on grounds of non-disclosure, misrepresentation, except on grounds of established fraud.

l Key points for senior citizens

Senior citizens must find out about the waiting periods and how these will affect the coverage for pre-existing conditions. They must review the clauses in the policy document related to any cappings, such as room rent. They should look at co-payments and deductibles to reduce their premiums. Co-payment involves sharing a percentage of the treatment costs while policies with deductibles require paying a specific amount before the insurer clears the rest of the claim.

l Premiums, claims and lives covered

In FY23, the premium collection from health plans grew 22% to 89,492 crore as compared with73,052 crore the year before. Half of the premium (46, 246 crore) came from group insurance,34,766 crore from individual business and Rs 8,480 crore from government business. The number of lives covered under individual policies in FY23 grew 2.5% to 52.9 million, lower than the FY21 levels. The health segment reported an incurred claims ratio (claims paid as percentage of total premiums) of 87.3% in FY23, the highest in general insurance.


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