Caring For Your Parents: All You Need To Know About Health Insurance Coverage

While planning about the health insurance coverage of parents, one has to probably think about the requirements that may emerge from 10-15 years from now, according to Harshvardhan Roongta of Roongta Securities Pvt.

"The best case scenario is when your parents have secured a high cover with base and super top-up plans early on," he said, during a televised interaction with NDTV Profit on Monday.

Highlighting the three crucial aspects of healthcare planning, Roongta said one has to ensure coverage for hospitalisation costs. Second, funds should be set aside funds for regular medication and checkups, he added.

The third point which Roongta underlined is that one should prepare for special equipments like wheelchairs or hearing aids, and consider expenses for a full-time attendant or any home modification if needed.

One of the key ways to manage rising healthcare costs is through Mediclaim policies, he said. "The best time to buy health insurance is when you are perfectly healthy."

Roongta noted that if pre-existing ailments are present at the time of buying a policy, then insurers may either reject the application, charge an additional premium of 10-12% or introduce a waiting period before coverage applies.

"Ensure that your parents have adequate health insurance. In today's time, it is important that you have a cover of Rs 20-25 lakh if you are in tier-2 and tier-3 city. If you are in a metro city, where the health costs are high, then you need to have a health cover of at least Rs 50 lakh to Rs 1 crore. Presently, Rs 10-15 lakh cover, may seem fine. But one has to think if the cover amount is enough for next 20 years," he said.

To maximise coverage and keep premiums affordable, Roongta suggests a combination of base policy that covers hospitalisation costs, and a super top-up plan that provides additional coverage beyond the base policy limit at a reasonable cost.

Roongta cautioned that one should not wait for the healthcare costs to go up before planning the insurance coverage. "As a lot of times, your health conditions may be such that the insurance companies may not even give you coverage," he said.

Besides insurance, Roongta stressed the need for a separate medical emergency corpus. "If at all there is a requirement, you should be able to save your loved one's life," he said.

This fund should cover on-hospitalisation medical expenses, as well as the immediate cash needs before insurance claims are processed.

Major pointers to remember while setting up emergency funds for parents:

• A separate medical corpus is essential beyond insurance.

• It covers expenses outside pre and post-hospitalisation periods.

• Focus on the medical corpus separately.

Healthcare mutual funds have gained popularity, but Roongta warns against treating them as a hedge against personal medical costs. "One has to look at it as a pure investment product. Choose the product depending on your time horizon and requirements," he said,

Roongta recommends allocating 10-15% of your portfolio to these funds based on individual financial goals.

"Its an independent decision. You could invest in a diversified fund and get the benefit of a corpus. You do not need to necessarily invest in healthcare itself," he added.

"For 8-10 years, opt for equity scheme. And for shorter timelines, choose hybrid or debt funds. Focus on availability of funds, not just maximising returns," Roongta advised.