Employer-sponsored health insurance serves as an important financial safety net for millions of Indian households. Several organisations also allow employees to include their parents under group medical policies, helping families meet healthcare expenses. The real concern arises when parents cross 60 without having a health insurance policy of their own. Can the medical cover provided by an employer offer adequate protection against the growing cost of healthcare?
Relying solely on corporate health insurance may not be a prudent choice. Such policies come with limitations and can expose families to substantial out-of-pocket expenses during medical emergencies.
Corporate cover comes with limitations
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The extent of parental coverage under a corporate health insurance plan depends on the employer's policy terms. In many cases, the protection comes with a relatively modest sum insured and restrictions on room charges, selected medical procedures and hospital bills.
A cover of Rs 3 lakh or Rs 5 lakh might seem reasonable on paper, but the amount may not stretch far in the event of a complicated surgery or an extended hospital stay. As treatment expenses continue to climb, families could end up bearing a sizeable portion of the bill themselves.
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Job changes can create insurance gaps
An important limitation of corporate health insurance is that the coverage is linked to the employee's job. A change of employer, an unexpected lay-off or a decision to take a career break could bring the existing medical protection to an end.
For parents in their 60s, losing this coverage can create a fresh challenge. Buying an individual health insurance policy at an advanced age may not be straightforward, especially if they have pre-existing illnesses. The premiums are also likely to be substantially higher.
Buying cover after 60 can become expensive
Age is an important factor in determining the cost and availability of health insurance. Premiums tend to rise as policyholders grow older, while insurers pay close attention to their medical records and existing health conditions during the underwriting process. This could mean longer waiting periods, restrictions on specific illnesses or additional charges.
Families that postpone buying a separate policy for their parents may face a tougher task later, both in terms of finding suitable coverage and managing its cost.
What should families do?
Families with parents nearing 60 should start looking beyond the medical insurance offered by an employer. Taking out an individual health policy can provide greater continuity of coverage and reduce dependence on the employee's job. The appropriate sum insured will vary according to factors such as household income, the cost of treatment in the parent's city, medical history and anticipated healthcare needs.
A super top-up plan is another option worth exploring for those seeking additional protection without paying for a very large base policy. Before buying one, families should check the deductible, exclusions and other policy conditions.
Families should also examine whether the employer's policy permits continued coverage after retirement or offers an option to migrate to an individual plan.
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