LM: DO WE CARE ABOUT OUR ELDERS?: Feb 25,2008

 India’s greying population is growing every day. Ac cording to World Popula tion Prospects (the popu lation estimates arm of the United Nations), India’s senior citizens will number 112 million by 2015, up from 77 million in 2001. For many of them, however, health remains a primary area of concern. That’s where health insurance policies meant specifically for senior citizens can be a lifesaver.

Yet, some say their premium rates have been doubled over the past year, others say insurance companies have in instances refused to renew their policies. Finance minister P. Chidambaram, in his budget speech last year, directed three public sector insurance companies to provide health insurance policies specifically for the older generation.

Following Chidambaram’s directive, a slew of mediclaim policies were introduced. But a look at the fine print suggests a lot more needs to be done to address the issue. A.K. Sood, 78, president of the Delhi Federation of Associations of Senior Citizens, says that riders attached to these policies have made them unattractive. “Senior citizens’ policies offer limited coverage to the policyholders,” he says.

“Even the co-payment clause, where the insured pays a part of the insurance Bill, translates to very restricted coverage.”

Though companies declined to share the number of such policies underwritten so far, they agree the number is low. “Even though we haven’t got many applications yet, we can’t say that our policy is not lucrative,” says Niraj Kumar of The Oriental Insurance Co.

Ltd. He says the company’s policy covers diseases they don’t see too frequently but which are expensive to treat. “The aim is to cover expensive diseases,” he adds. S.K. Sethi, of the New Delhi-based Ria Insurance Brokers Pvt. Ltd, doesn’t buy it. He says: “Insurance companies have come out with policies that make them as unattractive as possible for senior citizens.”

Currently, all the four public sector insurance companies offer senior citizens policies-National Insurance Co. Ltd, New India Assurance Co. Ltd, United India Insurance Co. Ltd and The Oriental Insurance Co. Ltd, along with two private sector counterparts-Bajaj Allianz General Insurance Co. Ltd and Star Health and Allied Insurance Co. Ltd.

THE WISH LIST 1. Increase in maximum sum insured Given the high cost of health care, the coverage provided is inadequate. For instance, National Insurance offers a maximum cover of Rs1 lakh while Badjaj Allianz offers a maximum cover of Rs3 lakh.

Oriental Insurance offers the highest cover of Rs5 lakh, but only for specific diseases.

2. Limited co-payment Co-payment is used as a device by insurance companies to keep a handle on premiums.

Under a co-payment plan, the insured pays a percentage of the claim cost. The practice keeps a hold on premium rates, but the policyholder will incur out-of-pocket expenses when filing a claim. Some companies also have add-ons such as maximum claim amount payable for particular diseases. For example, in the case of Star Health, the insured can file just one claim of up to Rs75,000 for cardiovascular disease, where the sum insured is Rs1 lakh.

3. No entry load If you are a senior citizen, and are taking a health policy for the first time, then be prepared to pay more than others. Some companies charge an entry load of around 10% of the actual premium amount for firsttime buyers. For instance, National Insurance and Oriental Insurance have an entry load of 10% over and above the premium rates for new entrants.

4. No limits /sub-limits on major illnesses At the time of buying a policy, many seniors may be tempted to sign on the dotted line without reading the inclusions and exclusions. This could be a risky proposition because the health policy might exclude, or have restricted coverage for certain conditions. “The language of these policies should be simple and clear, so that a common person can understand what they are paying for,” says 66-year-old Nand Kumar Mehra, who lives in New Delhi.

5. Medical tests Seniors are reluctant to opt for these policies because of the expense. The list of tests is long and costs can range from Rs1,500-2,000. For expensive tests, such as stress thallium, which scans for cardiovascular health and blood vessel blockages (Star Health needs one), the bill can add up to Rs10,000.

Sood says, “If companies start sharing part of the costs for these tests, more people will opt for these policies and it would also help insurance companies keep a track on false claims.” Write to us at businessoflife@livemint.com A PRIMER ON SENIOR CITIZEN HEALTH PLANS Company National Insurance* Varistha Policy mediclaim for senior citizens 60 to 80 Entry age 1 Maximum sum insured (Rs lakh) 90 Renewal allowed up to (Years) 10% Co-payment (% of claim amount) Yes Entry load for new entrants (10% of the premium) Comparison of premium rates (in Rs) 4,180 60-65 years 5,196 66-70 years 5,568 71-75 years 6,890 76-80 years Above 80 years Star Health Bajaj Allianz Oriental & Allied General Insurance Insurance Insurance Health of Senior citizen’s Silver privileged red carpet health health insurance elder (Hope) 60 and above 60 to 69 46 to 75 1 to 5 1 to 2 0.5 to 2 80 85 75 20% 30% & 50%** 20% Yes No No 4,500 5,000 7,170 4,800 5,000 10,755 5,700 – 13,444 6,100 – 6,400 – *Extra premium for critical illness cover **for pre-existing diseases/test reports not submitted Source: www.healthinsuranceindia.org; India Insure Risk Management & Insurance Broking Services Pvt. Ltd, Hyderabad-based insurance broker