Medical insurance is a vital part of overall financial planning. This provides protection for any large expense incurred for healthcare.

Every person should have some sort of medical insurance but it is important that senior citizens have this kind of cover at all times. The cost of taking this cover is also important; it has to be paid by the individual and should be affordable.

Most people look at the premium to be paid and consider this the cost, but there is something additional to be looked at. There is some recent good news for senior citizens on the financial costs of taking health insurance policies; this can be reduced in several cases.

Hence, fulfilling the conditions becomes important.

Expenses

There are various expenses in the process of taking health insurance. The most obvious is the actual premium to be paid for getting the required amount of cover.

In addition, there are expenses related to taking the insurance policy and will involve fulfilment of several conditions related to the policy -- getting necessary certificates, complete medical tests, etc.

The main item in this area is the medical tests conducted while taking the policy. If you are a healthy person who already has medical insurance cover and are young, then there is no need for such tests.

But for senior citizens there is no way out; they have to undergo several tests. This is essential to ensure coverage by the necessary policy and these tests will also bring out any health-related problems, if present.

If the tests are done at a medical institute where the insurance company directly pays the amount, then there is no problem. But this is not the case in several circumstances and usually the individual has to go and get the tests done from specified doctors and pay the cost of examinations. This amount can be significant, as the costs for several tests are high.

Relief

If this becomes an extra burden, then this will have to be factored into the financial calculations.

However, there is now some relief on this front as the regulator, The Insurance Regulatory Development Authority, has come out with specific guidelines for senior citizens' health insurance. This has several points related to the question of ensuring control over the loading of premium and the coverage available (till at least age 65).

On the expenses by the individual on the medical tests done before taking the insurance policy, there will now be an element of relief. Such tests are known as pre-insurance medical examination.

The regulator has asked the general insurance companies to ensure reimbursement of at least half of such expenses for those taking it. Further, insurance companies also have to empanel government medical institutions whose reports will be accepted.

Fine print

While looking at this entire issue, two points are important to understand who will actually get the benefit.

The first is that this will be beneficial mainly for senior citizens. If you are young, there might not be any need for pre-medical examination and in that case, the question of claiming any benefit does not arise.

The empanelment of government institutions can also mean a reduction in the cost incurred and this will also be a saving for the individual. However, there is a catch, because the reimbursement will be available only when the risk is accepted. That is, if the insurance company refuses to cover you, then the cost will have to be paid from your pocket and you will still be without cover, a double hit.

The second point is that this is applicable only after July 1, for all policies taken or renewed after this date.

The writer is a certified financial planner.

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