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Choosing The Right Sum Insured For Your Ageing Parents

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Do you recall the sleepless evenings your parents spent when you were sick? Parents are heroes. As they get older the roles reverse, it's time to become their hero. It's your chance to return that love and care.

One way to take care of your parents in their golden years is to have health insurance with an adequate sum insured. But how do you decide on a sum insured?

This article will guide you through the factors to consider when choosing the optimal coverage amount for your health insurance for parents.

What Is The Need for Adequate Coverage?

Family health insurance protects your parents and their health from rising medical costs. Hospitalisation expenses, including doctor's fees, room charges, medications, and diagnostic tests, can deplete your savings.

Health insurance for parents with a sufficient sum insured ensures the insurer covers these expenses, minimising financial stress on the family during a difficult time.

How To Assess Your Parents' Needs and Expenses?

Talk to your parents to understand their needs. Consider these factors:

1. Age

Consider your parent's current age and factor in health concerns that may arise in the future.

2. Existing Medical Conditions

Do your parents have any pre-existing diseases like diabetes, heart disease, or arthritis? Factor in the cost of ongoing medications and specialist consultations.

3. Lifestyle

Are they active and healthy? Do they lead a more sedentary lifestyle? These factors will influence the need for hospitalisation.

4. Family History

Is there a history of certain diseases in your family? Consider the possibility that these conditions may affect your parents in the future.

You can tailor the health insurance plan to their specific vulnerabilities by understanding their needs.

What Are The Considerations for Health Insurance Coverage?

Health insurance for parents comes in various plans, each with different coverage options. Here are some points to consider:

1. Waiting Period

The period after buying the policy before making a claim is called the waiting period. Choose a plan with a shorter waiting period for critical illnesses.

2. Outpatient Expenses Coverage

Does the plan cover OPD expenses like doctor consultations, diagnostics, and medicines?

3. Network Hospitals

A vast network of hospitals for cashless treatment makes access to quality healthcare easier.

4. Comprehensive Coverage/Add-Ons

Consider a plan that covers hospitalisation, pre- and post-hospitalisation expenses, AYUSH treatment, and annual health check-ups. For additional protection, you can opt for add-ons like critical illness cover.

5. Co-payment

It is a fixed amount you share with the insurer for each claim. Choose a co-pay amount you're comfortable with.

6. Sub-limits

Some plans have sub-limits on specific treatments. Know these limitations beforehand.

How To Evaluate Your Parent's Long-Term Care Needs?

When your parents get older, they may require long-term care facilities, such as assisted living or nursing home care. A regular health insurance plan does not usually cover both of these. So, consider including a long-term care rider in your parents' insurance policy. It provides additional coverage for these specialised care facilities.

What Are the Factors Influencing Your Decision About the Sum Insured?

Several factors influence the ideal sum insured for your health insurance for parents:

1. Your Age and Health

As your parent's age increases, medical costs tend to rise, so a higher sum insured becomes more important.

2. Medical History

If your parents have pre-existing conditions, a higher sum insured is needed to cover treatment costs.

3. Hospitalisation Costs In Your City

Medical expenses can vary depending on your location. Research the average cost of hospitalisation for major surgeries in your city to get a better sense of the sum insured your parents need.

Here's a general rule of thumb: Multiply your parents' annual healthcare expenses by 3–5 to arrive at a baseline sum insured.

How To Balance Financial Assessment and Affordability?

Health insurance for parents has higher premiums. Assess your needs, coverage, and budget to determine a sustainable premium amount. However, skimming the sum insured can lead to financial hardship if and when a large claim arises.

Here's how you can reduce the insurance premium without hurting the sum insured:

• Opt for a higher deductible.

• Choose a co-pay plan.

How To Research Insurance Options?

Once you understand your parents' needs and budget, research plans for their parent's health insurance. Here's what you should research:

1. Reputable Insurers

A few key parameters to look for are:

• Claim settlement and incurred ratio

• Network hospitals

• Number of policies issued

• Number of claims serviced

• Average days for settlement

• Percentage of claims settled in less than 30 days

• Percentage of complaints received on overall claims

2. Plan Features

Examine the plan details, such as pre-and post-hospitalisation coverage, co-payments, deductibles, and network hospitals.

3. Fine print

Understand exclusions, limitations, and claim settlement processes before finalising a plan.

Should You Get Professional Advice?

If you need some help, you can consult a financial advisor or insurance agent. They can:

• Assess your parents' specific needs and risk factors.

• Recommend appropriate plans based on your needs and budget.

• Explain different policy features and exclusions.

• Guide you through the claim settlement process, if needed.

Conclusion

Don't let rising healthcare costs worry you or your parents. The proper sum insured for their health insurance can help them age gracefully with access to the best medical care.

However, regular insurance plans might not always have the comprehensive coverage your parents need. HDFC ERGO provides various plans for health insurance for parents with customisable sum insured options. Secure their future, one step at a time.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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