Which Health Insurance policy should I buy for my senior citizen parents

Many insurance agents uses the term health insurance and Mediclaim interchangeably leaving insurance buyers confused between the two types of medical insurance. Mediclaim is an indemnity product, or in other words a Mediclaim policy will reimburse expenses incurred by you (up to the sum insured of your policy) in the event of a hospitalization. Please note that a Mediclaim policy will cover only the expenses incurred by the patient during his / her stay in the hospital. Health insurance on the other hand is a benefit product which makes a pay-out to the insured if certain types of certified illnesses are diagnosed. The key differences between Mediclaim plan are as follows:-

1. Unlike Mediclaim policies, hospitalization is not a pre-requisite for triggering a health insurance claim. Health insurance cover is more comprehensive than Mediclaim in that, it covers not only hospitalization expenses of the patient, but also his / her pre and post hospitalization expenses. Some health insurance plans may even cover loss of income to the patient arising out of the illness.

2. If you have a critical illness cover in your health plan, the insurer will pay out the entire sum insured if certain types of critical illnesses like cancer, cardiac arrest, kidney failures are diagnosed. Similarly if you have a personal accident cover, the entire sum insured will be paid out to you, if the eventuality as specified in your policy is triggered.

3. The maximum sum insured of a health plan is much higher than a Mediclaim plan.

4. A Mediclaim policy will cover most types of hospitalization expenses of the patient. On the other hand, as discussed earlier, a Health Plan will cover only certified illnesses.

5. If you have two Mediclaim policies, you cannot make claims on both for the same illnesses. On the other hand, if you have a Mediclaim and Health insurance policy, you can make two claims for the same illness.

Health risks are significantly higher for senior citizens. These risks may not be limited to the certified illnesses covered under your Health Insurance policy, but may still require hospitalization and considerable expenses. Therefore in our opinion a Mediclaim policy is a pre-requisite, especially for senior citizens. However, you should make a determination, in consultation with a health insurance advisor (if required), if your parents are susceptible to critical illnesses based on their medical history and also on your family history (because some critical illnesses can be hereditary). Treatment of critical illness is much more expensive than treatment of other types of diseases. Based on the health risk profile of your parents, you may want to buy a separate critical illness cover for your parents in addition to their Mediclaim policy.