What type of insurance cover should a senior citizen buy?


I am a senior citizen. How much cover should I opt for the first time? Will there be a four-year waiting period for pre-existing diseases (PEDs)? Should I buy a less sum-insured policy to save on the premium and increase it after four years?

—Name withheld on request

It will help if you buy a sum assured equal to your last annual income with a minimum amount of 10 lakh. There is a limited advantage to buying sum assured in parts. In fact, the risk may be that at a later stage, the insurer may refuse to enhance the sum assured. The advantage of buying sum assured together is that the waiting period on PEDs would run together. So, after a block of 4 years, you will have the full sum assured. Also, with a higher sum assured, you get no claim bonus on the full sum assured.

I want to buy a term life insurance policy. I have recently quit smoking. It has been around six months now. Can I buy it as a non-smoker from an online portal? Also, will my nominee face any issues at times of claim?

—Name withheld on request

Insurers ‘policies vary regarding the reclassification of smokers into non-smokers. Some insurers consider up to five years as the minimum gap required before an erstwhile smoker is reclassified as a non-smoker. The best would be to check with the specific insurer and completely disclose your smoking status.

Non-Disclosure or wrong classification can lead to claim repudiation. At the time of claim, the insurer may do necessary investigations to ascertain your smoking history. If the smoking status is found to be incorrectly declared, the insurer can repudiate the claim, particularly in the first five years of the insurance.

My child is ten years old and has had nephrotic syndrome for around three years. Will he get a health policy?

—Name withheld on request

You can get a health insurance policy for your son. While the presence of a major health condition reduces the chance of issuance of a health policy, it does not make it zero. In such a case, the insurance company can underwrite the policy in other ways. For instance, the insurance company may specify ‘nephrotic syndrome’ as a pre-existing ailment and exclude it for the specific waiting period, between 2 and 4 years. Second, insurers may want to issue the policy with a certain loading on standard premium, exclude the ailment as a pre-existing disease, and cover after 2 to 4 years. Third, the insurer could permanently exclude some illnesses and issue the policy. This would allow you to claim for all other ailments except the specifically named exclusion.

You must apply for a policy with one of the larger health insurers. Given their size, their ability to accommodate deviations from standard risk is more.

Abhishek Bondia is principal officer and managing director, SecureNow.in.

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