Moneylife Foundation hosted its 166th seminar titled “Insurance at 50+” conducted by Raj Pradhan, who has written several cover stories for Moneylife magazine. He gave insights to an eager audience on insurance options for life and health insurance, which gets difficult and expensive with an increase in age. He spoke about Personal accident (PA) and added that PA cover premium remains unchanged, even though most products are offered only till 70 years. Apart from this some car insurance products offer premium discounts for customers in the age group of 35 to 60 years. Also overseas travellers should consider buying health insurance as medical treatment can be unaffordable abroad.
There are few mediclaim products in the market which do not have any entry age limit, but insurance companies reserve the right to underwrite. It means that if you are a senior citizen and not in best of health, you will have a difficulty in buying health insurance. If it is made available, then it will be a high premium loading. Life insurance can also be offered at a higher age, but at a price. The premiums you see for online term plans may not be the premium you pay after your medical tests.
Accrording to Mr Pradhan, PA policy is inexpensive and a must-have. Critical illness can be thought as an add-on to your mediclaim. It will pay lump-sum irrespective of your expenses on medical condition. It is useful as many times after hospitalisation you may not be able to work for an extended period and mediclaim will not cover beyond hospitalisation expenses and few months of pre and post hospitalisation expenses.
A major part of the audience was interested in the concept of super top-up. Mr Pradhan pointed out that it is a good product for those who are already covered by a corporate or retail health insurance policy and wish to go for a higher coverage. This product is also useful for someone without mediclaim but is willing to pay for medical expenses up to the high deductible barrier (Rs2 lakh or Rs3 lakh) before the super top-up policy kicks in to pay for additional medical expenses.
Mr Pradhan gave the audience a checklist for understanding what a mediclaim policy offers which should be used before you buy the product. Understanding of room rent limit, co-pay, sub-limits, permanent exclusions, pre-existing diseases, claims loading, no-claims-bonus and day care procedures can help to narrow down your search. A cheapest mediclaim may not be the one with the least features and the most expensive mediclaim may necessarily not have great features. There is a need to study the policy for making an informed decision.
He explained that a senior citizen mediclaim is an option for those who missed the boat of buying health insurance at a younger age. It obviously comes with lot of restrictions and you may end up paying a higher premium. Portability of your regular mediclaim policy can be difficult at older age even if you don’t have any medical ailment.
Mr Pradhan even said that life insurance needs at 50 are also high due to dependent children and spouse, too, as the children may not be self dependent and may be still studying. There are several parameters to consider for finalising on the right term life insurance product.
Your life insurance needs will go down as you get near retirement. Annuity is another product from life insurers that gives a fixed stream of income throughout the life of the policyholder. Your nominee will get back the purchase amount, but you will not be able to get it back during your lifetime.