Health Insurance for your parents

How to decide on a health insurance plan for your parents and why should they be different from the family floater plan? We will get to know in this article. Dear friends welcome to the next part of 'The Complete Guide to Buying Insurance' with Policybazaar.com as my knowledge partner. I will cover all the minute details of insurance in this series, and today's topic is dedicated to health insurance, and that too is specifically for our parents. When it comes to parents' health insurance, then the approach we should adopt to select the right insurance plan is to make sure it has all those things which are required for our parents.

They are very different from when we are deciding on a health insurance plan for our family or our own selves. I will share 4 specific things with you in this part.

  1. Why should the health insurance that we choose for our parents be different from the family's health insurance?
  2. When we choose health insurance for our parents, then what are the things you must look out for so that the plan is useful for our parents?
  3. What is the difference between a corporate insurance plan and an individual insurance plan and which are things that are important to know?
  4. How to buy it?

Health Insurance for your parents

It is obvious that our parents are aging, their illnesses are increasing, and they have reached an age where the risk of attracting illnesses or falling ill, is higher, that is why their health insurance plan should be very different from the plan that we choose. What was the main thing about insurance? If 'X' happens then give me financial protection. 'X' in this case of insurance is if illness happens or hospitalization happens. if I were to ask you a very simple question which is, what is the probability that you at the age of 25-35-20, whatever age you are, or your immediate family, could be your partner, your kids, what are the chances of their hospitalization as against what is the chance of hospitalization for your parents? Then obviously, the probability for your parents is more, and that is why they are in the same plan as your family's, then unnecessarily you would be giving more premium for that coverage. Coverage means what is the amount of financial protection you get. Premium means how much are you paying to the insurance company annually for that amount of coverage. Why? Because in Health insurance, everything is derived from the oldest family member. So for example, if your parents are 60 years old, and you are 30 years old, then the premium will not be decided based on your age, it will be decided on the basis of your parents' age which is 60 years, and that naturally means, since the probability of them getting hospitalized is more, you will end up paying a lot more, so the first thing which I will strongly recommend, whenever you choose a life insurance plan for your parents, then make sure that it is only for them, do not include yourself or your family in it.

What are the things in health insurance that you should keep in mind that your parents will need? There were a few things that I have listed and I am going to discuss them now.

1. Hospitalization expenses

First and foremost, which is the main thing, hospitalization expenses. God forbid, if your parents get hospitalized, due to some illness, so some surgery or so on, then all the expenses, doctor's visit, room charges, test charges, ancillary services, and of those can be covered by Life Insurance Company.

2. Pre-and Post-Hospitalization expenses

Second, pre-and post-hospitalization expenses. If the hospitalization is declared or pre-decided, for example, a surgery, then a few days before that and a few days after hospital discharge, all your expenses for recovery or preparation, are also provided by the insurance cover.

3. Critical illness cover

If there is andy critical illness like cancer or so on, a cover for that too which need not be around hospitalization but can be around just maintenance of medical expenses.

4. Daycare procedures

They are limited but still there. Procedures where you do not need hospitalization but it is like on involved surgery, for example, cataract surgery so that are some insurance which covers cataract surgery or Daycare surgeries also.

5. Domiciliary hospitalization

These are the things which we come very huge, especially at the time of covid. At home, if you can't go to the hospital, whatever treatment you are getting at home will be covered as well. And 

6. Pre-existing illness 

the pre-existing illness which is very important since our parents are aged, it is possible that they may have a problem of BP, or diabetes, and when we are buying the insurance for them, they may already have these illnesses, so how does the insurance take care of that? It is also an important question to ask.

So keeping all these things in mind, you should keep some other things in mind. which is like this...

1. Hospitalization & Room rent

The first question is the around hospitalization and the room rent their itself. Dear friends, many insurance companies allow you room rent of up to 1% of your total insurance cover, for example, if your insurance coverage is for 5 lakh rupees for your parents then 1% of it which is 5000 rupees is what is the maximum payable amount for your room rent. For ICU it is 2% which is 10,000 rupees. If you live in a big city then you would know that in 5,000 rupees you don't get a hospital room especially if it is a private hospital, and you definitely will not get an ICU in 10,000 rupees. So, the first thing you have to bear in mind when you are buying health insurance for your parents is, to know whether there is a capping on the room rent or should I take on an insurance plan which has no capping. you should you that insurance plan.

2. Post-Hospitalization expenses

Many insurance covers or plans don't cover your expenses once you are discharged from the hospital. That is not desirable, so you will take an insurance policy that will provide you post-hospitalization expenses as well for a period of time, usually, that interval is for 30-60 days. Where all the expenses which are post-hospitalization, attached to the illness or whatever surgery for which hospitalization happened, that will be covered, that is something that you should bear in mind.

3. Pre-Existing Diseases (PED)

Third and perhaps the most important thing is PED. As I said, since our parents are aging, they may already have some illnesses it could be BP, could be diabetes, which are the two major illnesses in India. If it is so, and because of these diseases which are pre-existing before you took the insurance if there is any surgery or hospitalization because of these, then will the insurance company bear its expenses or not?

So typically there is a waiting period, there is a waiting period for PED, which could be anywhere from one year and the standard is 4 years, which means whichever you buy an insurance plan for your parents, then they will not get a cover for the any of their PED or pre-existing diseases for 4 years after that only they will get a cover. So, naturally when you try to take an insurance cover, then choose the least waiting period possible. My preference is one year, there are some plans which take up PED from day 1 itself. They, of course, will be very expensive. One year is usually a good time, if you know that the PED is in control, diabetes is in control, hypertension or BP is in control, and you know that at least for one year. God forbid, nothing will happen. So you can wait for a year and after one year, if any hospitalization is required due to these illnesses, the insurance cover will be given. This waiting period should be as low as possible.  Please do not compromise on this, please don't be penny wise and pound foolish, and don't take a long waiting period for your parents to save money. Based on this the question that I am going to discuss corporate and individual insurance, this becomes very important, I will come to it, read the article till the last.

4. Family floater plan

Next thing, family floater plan or a plan for parents only. As I said, I will not be recommended a family floater plan. Why? You are young, If you are married then your spouse and children are also very young, so you can get a higher insurance cover at much less premium, but if you will add yourself with your parent's health insurance, then you would unnecessarily be paying a much higher premium. So, take two insurance policies, one for your parents which is totally dedicated to them, take as much insurance coverage as possible in that, I would recommend 5-10 lakh rupees for two people is safe, and take separate insurance for your family, which will have a much lesser premium, I am actually showing it to you how less that can be, and that will be the smartest thing to do. Don't try to take a single plan by adding your age to your parent's age. Insurance Companies will try to sell you this only because they make much more money through you when it is a floater plan with year parents. I will share the consideration of a family floater plan with you in too next part of  'The Complete Guide to Buying Insurance'.

If you are a salaried employee which means you are working somewhere, then it's quite likely that you have a corporate health insurance plan. In the corporate health plan, you, your partner, your kids who will be your dependents, and your parents and in-laws are also covered. If it happens, great! It is something that you should absolutely take and cherish, but there are two things that you know...

  1. When you leave the company then your health insurance is canceled, and if there was a waiting period for pre-existing diseases in that insurance, then that also gets rest. This is very important and many people do not know about it. To prevent this, either do not leave the company till the pre-existing period does not get over or another thing, which is the better way to do it, you can transfer your corporate plan to an individual plan before you leave the company. When you do this your waiting period continues, even if you leave the company after 3 years, but if you got it transferred from corporate to individual plan then it would take you only one more year in the individual plan to complete the waiting period of the PED. Please understand this carefully.
  2. As a general recommendation, since the health insurance gets canceled whenever you leave the company and you will have to take an individual plan, which will have its own term and conditions, it is better to take another separate plan for your parents in addition to the corporate plan. It is not necessary to take it for yourself because as I said, you guys are young, the probability of your hospitalization is much less, and God's grace you remain healthy, but don't take a risk for your parents. Even if you get a corporate plan and your parents are included in it, please take separate health insurance for your parents.

No Claim bonus

The final thing is about your ' no claim bouns'. If you did not claim anything in one year which means, there is no hospitalization, you did not touch the insurance cover, you did not utilize it, then every insurance company gives a no claim bonus. In another world, if you have taken an insurance cover of 5 lakh rupees and you have not claimed anything for one year, then at the end of the first year or the beginning of the second year, when you renew this policy, the company will give you a no claim bonus which is 5%, that is 25,000 rupees. So, next year for the same premium, you will get a cover of 5.25 lakh instead of 5 lakhs. This is just the insurance's way of saying, Thank you for not using any of our claims in the year, and also this is a great way to incentivize us so that we don't start claiming frivolously. Many times, it so happens that if there is a small surgery or anything like that, we think it's better to get hospitalized because it is covered by the insurance. This is a great way for you to not fall into that trap because insurance should be used only for critical things, when you do not have money at all, please don't use it randomly, that is not the best use of it.

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