Senior citizens should use top-up plans to beat medical inflation

Health insurance premiums for senior citizens have seen a significant increase. In the past five years, these have gone up between 50 per cent and 100 per cent, increasing the outgo especially for those senior citizens who want to enhance their medical insurance cover or buy a fresh policy.

“Premiums have increased as more older individuals are opting for health insurance than young ones. If claims rise, insurers have no option but to revise their rates. Another reason for a hike in the premium is medical inflation, which is at 10 per cent,” says Dhruv Sarin, head of health insurance,

A senior citizen looking at enhancing his cover has limited options. He can ask his insurer to increase the sum assured, and the premiums will rise in tandem, or he can buy a fresh senior citizen policy that many insurers have launched recently. “Instead of these two, a better option for a senior is to buy a super top-up cover,” says Naval Goel, CEO and founder,

A top-up medical insurance plan offers a high cover at a low cost. But it comes with a deductible. If a senior already has a Rs 5-lakh policy, he can go for a Rs 10-lakh top-up with Rs 5 lakh as deductible. If medical expenses cross Rs 5 lakh, the individual can use the top-up cover to pay. For a 70-year-old, while the premium for the base policy of Rs 5 lakh would be in the range of Rs 25,000 to Rs 30,000, the top-up cover can be bought for Rs 11,500 to Rs 14,000.

Top-up covers come in two variants — catastrophic and aggregate. The latter is called as a super top-up and it covers the insured if he exhausts the base policy cover any time of the year. If an individual has a base policy of Rs 5 lakh and exhausts this sum insured in multiple hospitalisations, he can still use the super top-up plan in the policy year. For catastrophic or plain-vanilla top-ups, each hospitalisation needs to cross Rs 5 lakh. For those who already have an insurance policy, expert advise against buying a fresh one. While there are many plans meant specifically for seniors, they come with a lot of restrictions. Most of them have a compulsory co-pay of 20 per cent. They also have restrictions on the amount an insurer will pay for specific disease. An individual should opt for a senior citizen plan only if he doesn’t have an insurance cover at all. In fact, if an individual thinks that he is financially capable to pay Rs 3 lakh of medical expenses, he can only go for a super top-up plan rather than a base policy.  Most super top-up plans come with a deductible of Rs 3 lakh or more. If a senior has an insurance cover of Rs 2 lakh or below, he should ask the existing insurer to increase the sum assured to Rs 3 lakh and then opt for a super top-up plan. 

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