Health Insurance for Parents - Saving Taxes With Health Insurance

Health Insurance for Parents - Saving Taxes with Health Insurance

The family and friends of 57-year-old Mayank Agrawal were shocked when he was admitted to hospital for bypass surgery. After all, Mayank was a fitness freak and had always remained in the pink of health. He went for long walks in the morning and followed a disciplined, healthy diet. He had not even caught fevers in the past few years. The cost of surgery along with other medical expenses cost his son Nishan about Rs 3 lakhs. Nishan withdrew his fixed deposits to pay the bills because he had not purchased health insurance for parents. If he had, his savings would have remained intact.

What are the key takeaways from this example? One, medical emergencies can strike even a fit and healthy elderly person. Two, health insurance for parents is a must.

Importance of Medical Insurance for Parents

• It is an investment in the life of people who have given you birth and raised you to become what you are today. A small outflow of the amount (premium) is very insignificant in comparison to securing their health.
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• Due to their age, parents are more prone to sickness and disease no matter how healthy a routine they stick to. The medical expenses can become recurrent as they age further.
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• The healthcare costs have risen significantly over the past few years. In fact, a survey revealed that the average medical expenditure per hospitalisation has increased between 160-176%. You can imagine how pricey the healthcare services may get in the future.
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• The employer health insurance availed by you or your parent (if still in employment) may not be sufficient to cover the medical contingencies as and when they arise. Moreover, the employer health insurance lapses after retirement.
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• Your parents do not have stable or adequate income to fund their medical bills. The onus lies on you to support them.
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• The life expectancy of Indians has increased. As per the last statistics available, it is 66.9 years in men and 70.3 years in women. This indicates that your parents will live longer and may require frequent medical attention.
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• You get tax benefit under section 80D of Income Tax Act of India. The premium paid on health insurance for parents is eligible for deduction from your income over and above what you pay for the rest of your family (you, spouse and kids). The following table will give you a clear idea how much tax advantage you can gain.

Scope of Medical Insurance for Parents

Health insurance gives coverage for the following expenses:

• Pre and post hospitalization
• Room rent
• Daycare procedures (which do not require hospitalization)
• Domiciliary treatment (homecare)
• Doctor fees
• Diagnostic tests
• Medicines
• Ambulance

The coverage may be less or more across plans and insurance companies.

Individual vs Family Floater Plan

You have an option to take a separate plan for each parent under an individual policy or include them in the family plan. However, it is advisable to take an individual plan:

• If your parents are above 50 years of age because the premium on a family floater is determined by the age of the eldest member. More the age, higher the premium.
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• If your parents are suffering from any pre-existing disease or prone to frequent health hazards.

Choosing the Right Medical Insurance for Parents

You should consider the following parameters while selecting a health plan for your parents:

1. Entry Age: This is the first criteria that you will have to bear in mind. The entry age for senior citizens differs from one insurance company to another. However, according to Insurance Regulatory Development Authority (IRDA), it is mandatory to offer coverage to individuals at least up to 65 years of age. Many companies provide insurance up to 80 years also.
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3. Renewable Age: This age should not be confused with entry age. Renewable age is the age or time till which you can renew health insurance policy for your parents. You may want to opt for a plan that offers lifelong renewal.
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5. Sum Insured: This is the maximum amount that you can claim from the insurance company. It depends on the age and health status of your parent. Do note that higher the cover, higher the premium you have to pay. However, it is always advisable to take higher sum insured since the treatment costs of elderly people are quite steep.
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7. Disease Coverage: Check the list of diseases, conditions or surgeries that a health plan covers. It is advisable to buy a plan which covers the maximum number of diseases and includes the ones that your parents are most prone to. Also, check out if the list covers non-allopathic or alternative treatments.
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5. Pre-existing Diseases and Waiting Period: Some insurance companies maintain a clause whereby you can avail a claim for pre-existing diseases only after one or two years of waiting period from the commencement of policy date. A pre-existing disease is one which your parent already suffers from at the time of taking a policy. Always choose a plan which has a minimum waiting period. Do not forget to disclose pre-existing diseases in the application form to avoid the chances of claim rejection.
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7. Others

• Network of hospitals
• Cashless claim facility
• Free medical checkups
• No-claim bonus on renewal if you do not make the claim during the policy duration

Health insurance for parents is a necessity to safeguard their health and for your financial peace of mind.