A health insurance plan has become a necessity given the rising medical costs. Your clients might also be aware of the rising need of a health plan and that is why they buy a health insurance policy for themselves and their family members. Most often than not, when buying a family floater health plan for the whole family, your clients tend to include their dependent senior citizen parents under the scope of coverage. While this ensures that a single plan covers the whole family, including parents in the same family floater cover might not prove beneficial for your clients. It is ideal for your senior citizen clients to have a separate health insurance policy for themselves. If you are wondering why, here are five main reasons why –
#1 – Existing medical conditions limit the scope of coverage
As individuals age, they become physiologically weak and develop various kinds of ailments like diabetes, hypertension, etc. At the time of buying a health insurance plan, these illnesses are called pre-existing illnesses and they are covered after a specified waiting period. The waiting period might stretch up to 4 years and your senior citizen clients might need medical assistance for their ailments during the waiting period. This would cause out-of-pocket expenses. Moreover, if the ailments are severe in nature, the insurer might put restrictions on the coverage for the whole family. This would limit the scope of coverage proving unfavourable for younger members who are also insured under the floater plan. Having a separate senior citizen health plan would allow your older clients to avail a better scope of coverage suitable for their needs.
#2 – Restrictions on entry age under normal health plans
Under family floater health plans, the maximum entry age is usually limited to 65 or 70 years. If your clients are in the higher age bracket, they would not be able to avail coverage for themselves under such plans. Senior citizen plans, on the other hand, are specifically designed for older individuals and would allow them coverage despite their old age.
#3 – Premiums of family floater plans would be higher
Under family floater plans, the premium is determined based on the age of the oldest member. If senior citizens are included in the scope of coverage, the premium of the floater policy would be higher since the oldest age would be considered for premium calculation. This creates an unnecessary premium increase and is not recommended.
#4 – Frequent claims would hamper no claim bonus
As mentioned earlier, senior citizens might require frequent medical attention due to their failing health. This would result in frequent claims under the family floater coverage denying the family the benefit of no claim bonus.
#5 – A separate health plan allows additional tax benefits
Let’s not forget the tax benefit of having a separate health insurance policy for senior citizens. As per Section 80D of the Income Tax Act, 1961, premiums paid towards a health insurance policy are allowed as a deduction up to INR 25,000. The limit becomes INR 50,000 for senior citizens. Moreover, if an additional policy is purchased for senior citizen parents, an additional deduction of up to INR 50,000 can be claimed. This additional tax benefits definitely makes having a separate plan a worthwhile deal.
What should you recommend to your clients?
If you have clients who cover their senior citizen parents under their family floater plans advise them against it. Educate them on the above-mentioned reasons why including dependent parents under a family floater plan is not wise. If, on the other hand, you have senior citizen clients, you can pitch your clients the above-mentioned reasons why they should invest in a separate health insurance policy for themselves. A senior citizen health insurance plan has been designed with the objective of providing a good scope of cover to senior citizen individuals. You should, therefore, advise your senior citizen clients about the right product for their health insurance needs.
So, provide your clients with the correct advice, help them invest in a good senior citizen health insurance plan and also grow your business in the process as you increase your sales.
