Recently, there were a few reports on social media in which older people had shown concern about the rising health insurance premiums and their disability to continue with their existing health policy if the premiums continue to increase further. What should senior people do if their health insurance premium shoots up?
The need for a health insurance policy becomes much more important as you get older. Due to ageing, the chances of hospitalisation increase along with other medical expenses and the retirees also live with constrained financial resources, so health insurance becomes highly essential after retirement. However, due to rising hospitalisation costs and a spike in medical inflation, the premium on health insurance policies also increases simultaneously. What should you do if the health insurance premium increases beyond your financial capacity after your retirement? Here are some steps that can help you avoid discontinuation of your health policy if premiums increase after your retirement.
Compare With Other Health Policies Available In The Market
In some of the cases, the premium was increased by only one particular health insurance company. So, instead of panicking, you must compare the premium charged by other health insurance companies on a policy with similar features and for a person of your age. If other companies are offering health policies at a lower premium, you may choose the portability option to switch your existing insurance to a company that offers a good health policy at a lower premium.
Include A Deductible In Your Health Policy
Do you know, many health insurance companies allow a significant discount on the health insurance premium if you agree to include a deductible in your policy. A deductible is an aggregate amount that you have to pay from your pocket before your health insurance pays the claim under its policy.
For example, suppose you have a health insurance cover of Rs 10 Lac with a deductible of Rs 50,000. It means, during a policy year, if there is a claim of Rs 2 Lac, you have to pay the initial Rs 50,000 from your pocket, and the remaining Rs 1.50 Lac will be paid by the insurance company as a claim. If you made another claim of Rs 1 Lac during the same policy year, the insurance company will pay the entire Rs 1 Lac as a claim without deducting any amount because you have already crossed the deductible threshold in that particular policy year.
So, the deductible is calculated as an aggregate of eligible medical expenses incurred by the policyholder during the policy period.
Lower The Cover Size
If you are not able to pay the premium for your existing policy, you may lower the size of your insurance cover to fit into your budget. Instead of living without health insurance, even after reducing the cover size, you’ll have some support from your existing insurance policy.
Get Super-Top-Up Health Cover Along With A Lower Base Health Cover
Having a super-top-up health policy can help you reduce the premium that you pay for your health insurance. You can lower the insurance cover in your base policy and take a super-top-up insurance cover with a deductible equal to the size of your base policy. For example, suppose your base policy size is Rs 5 Lac, then you can take a super-top-up policy of Rs 10 or 20 Lac according to your budget and medical needs, and keep the deductible value to be Rs 5 Lac. The total premium payable for your health cover will reduce significantly without compromising the size of your overall health cover.
Don’t Exit The Policy Abruptly
After paying insurance premiums for a long period, it won’t be the right step to discontinue your health insurance, especially at a time when you need it most. So, try various steps that are discussed above and make sure that you stay insured in your retirement days.
The author is an independent financial journalist
