Insurance Article, The Insurance Times 2021, The Insurance Times May 2021


Of late, human lives are fraught with increased incidence of health ailments on account of routine and sedentary lifestyles. Though there is considerable improvement in medical technology in addressing the health emergencies, the associated costs for treatment are also on the rise.

Any hospitalisation without health insurance potentially creates a financial `tsunami` in the family thereby causing mental anguish and stress. Thus, protecting self and loved ones from any health eventuality is a must by choosing an appropriate health insurance plan. “Health is Wealth” is what we know. It is being realised, going forward, that health requires a lot of wealth.


Life is full of uncertainties but ‘Aging’ is certain and we have to live with the age-related ailments with the support of family members. In the past, our traditional Joint Family system used to provide an excellent support structure with a philosophy “One for All and All for One”.

However, the Joint family system is moving to Nuclear families on account of increased pace of relocation of people within the region, across the states and even abroad in pursuit of employment, career opportunities and improved livelihood.

Though the children love their parents and wish to take care of their requirements, they find it difficult to manage their financial resources on account of increased living costs, health and education expenses. Truly, these factors shattered the long-established system and had adverse impact on Gen-S segment.


In the above backdrop, most of the senior citizens are living independently with little or no support from their children/family members. The increased medical expenses have become a burden on the weak purse strings of Gen-S as their sources of income is limited mostly pension and interest income.

Thus, this segment is looking for formal health care service providers and also opting for Health Insurance Schemes to meet their present and future medical needs to lead their lives independently, peacefully and gracefully.


As per the census, around 11 crore people (8.30% of the population) are in the age group of above 59 years and another 10 crore people (7.90% of the population) are in the age group of 50 to 59 years, will be joining Gen-S club shortly.

It is observed that approximately 55% of senior citizens are covered either under government-sponsored health schemes or purchased health policies on their own and the remaining 45% people are left out of any health insurance cover.


Among the insured lot, Group Health Policies are playing an important role as it has inbuilt features viz., floater policy covering spouse, children and parents, waiver of medical check-ups and Pre-Existing Diseases (PED), lower waiting periods, cashless hassle-free treatment and low premium rates. However, the flipside points are:


  • Normally, under group policy, it is expected that uniform premium is to be levied across the members irrespective of the age. However, the insurance companies are levying premium based on the age of the policy holder which is against the ground



  • The naive policy holder doesn’t have any decisive role in negotiation of premium rates as the aggregator is only the competent authority to have dialogue with the But in practice, they are failing their responsibilities and simply accepting the premium rates and other terms without any purposeful discussions with members.


  • By and large, the retail policy holder is eligible for “No Claim Bonus” while renewing the policy but the same facility is not extended to group policy holders on the excuse that the premium is low compared to individual Thus, the insurance companies are conveniently misusing the guidelines to exploit the policy holders.


  • Contrary to the common belief that the group policies are cheaper compared to retail policies, the insurance companies have been resorting to hike in premium rates on an ad-hoc basis on the pretext of ever-increasing medical costs and thus making the group policy unaffordable especially to senior


  • The claim ratio, a decisive factor in determining the premium rates, crucially depends on number and amount of claims. While the per cent of claims to total policies remain the same, the claim amount has been on the rise due to reported increase in service costs of the hospitals. Further, there is no uniformity and transparency with regard to treatment charges of various ailments. The nexus between Networked Hospitals and Third Party Agents (TPAs) also not ruled out and the regulator needs to focus attention on this


  • The increased GST is also making the health insurance policies


The increased premium rates, especially in higher age groups, forces senior citizens to choose the exit route. Truly, it is an unethical practice and also unwarranted treatment being adopted by the Insurers towards senior citizens whose contribution to the nation-building is invaluable.


Barring PM-JAY, presently there are no government-sponsored health insurance schemes for middle-income group in general and senior citizens in particular. The alternative available to this group is either to rely on private sector on payment basis or depend on the mercy of voluntary organizations for free medical services.

In the present scenario, the minimum health insurance coverage required for a family should be Rs. 5 to Rs. 10 lakhs and the premium quoted by the insurance companies is in the range of Rs. 25000/- to Rs. 90000/- per annum depending on the age of the insured.

Under these circumstances, the pensioners whose annual income is below Rs. 5 lakh need to earmark minimum of one or two months pension towards purchase of health insurance policy. This is truly a burden to senior citizens, lest they have to choose an exit route which is a highly risky and precarious one.





While appreciating the government moves in improving the health care in the country duly covering majority of poor families under PM-JAY scheme, still many senior citizens like retired employees of Public Sector Banks / Public Sector Units

/ Corporate Bodies / Corporations / Private Companies, Self Employed & Professionals, Farmers & Artisans etc., whose annual income is below Rs.5 lakh and who are not members in any Government health insurance plans, need to be covered under this scheme on priority.

Further, there is an imminent need to support senior citizens whose income is between Rs. 5 to Rs. 10 lakh per annum with cross-subsidisation by the respective institutions in case of retired employees and with regard to others, it should be done by the centre/states.


The cost of the health insurance policy mainly consists of claims, operating expenses and taxes. On implementation of GST regime, the tax component has increased from 15% to 18% which is a big burden on the policy holders. Health care being a priority subject on the government agenda, taxing the individuals that too on purchase of health insurance policies is not fair.

Government need to revisit its stand and initiate steps to bring down GST to zero forthwith since the senior citizens need it the most.


Since health policies are subjected for renewal every year, it is the responsibility of the insurer to inform the changes in premium or any other terms & conditions of the policy, to the insured well in advance. Conversely, the insurance companies are communicating the revised premium rates just before the due date of the policy, causing inconvenience to the insured.

Thus, the regulator has to ensure that the policy holder receives communication from the insured minimum three months before the due date to enable him/her to take informed decision either to renew the policy or to switch to other insurance companies with seamless portability.


Levying premium based on the age of the policy holder is to be scrapped forthwith especially in case of group policies. The revision of the premium, if any, should be reasonable and uniform across all age groups.


As per IRDAI guidelines, it is the responsibility of the insurance companies to transfer the credit gained by the policy holder (individual or group) for pre-existing conditions and time bound exclusions, from one insurer to another insurer within the time frame and without any rider.

Contrary, the group policy holder is deprived of portability as the Group Aggregator (GA) is not evincing any interest to take up the matter with the concerned for resolution. This is compelling the policy holder either to continue with the same insurance company, though not interested, or join in another company and wait for 2 or 3 years for pre-existing disease claims. The regulator has to look into this area and ensure the portability to all policy holders who are interested.


It is observed that the majority of GAs are not evincing the desired attention to protect the interests of the group members and not exercising their prudent negotiation skills with the insurance companies while renewing the policies. They are more interested in fee income and dropping the policy holders like hot potato to the mercy of the insurance companies.


The argument of insurance players in favour of hike in premium is mainly due to increased claims coupled with medical inflation. The chief reason for this is not having uniform rate for each ailment or disease and the treatment cost varies from hospital to hospital within a city/town. Further, it is a well-known fact that private hospitals are charging extra to card holder compared to normal cash payment. Thus, monetary cap on ailments and uniform billing with or without health card is the need of the hour.


The Gen-S segment is known for their hard work, sacrifices, devotion and dedication to the family, organisation where they worked as well as to the society. It is not out of place to mention that the senior citizens are the most law-abiding lot and have been genuinely paying taxes all through the years for the nation building. In the process, they have exhausted all their energies and resources and are left with little income to lead their second innings independently.


“Respect Elders”, though has a resonance in various forums, but very little is done in letter and spirit. The Gen-S group is forced to look up to the Government, Regulator and former employers not for any freebies or charity but for deserving health coverage to continue their journey in their twilight years with peace and dignity. The stakeholders need not be reminded that this moral act is the least tribute that can be paid to the elders who were once born young. Hope, good days are ahead for Senior Citizens!!!

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