Last Updated on Apr 30, 2024 by Anjali Chourasiya
‘Senior citizens can now take the health insurance policy’, that’s the new law, says news and WhatsApp forwards.
What is it exactly? Weren’t senior citizens allowed any health insurance policies earlier? What does the new law say? Who will benefit from it? I say that this will benefit youngsters more than old. Why? Let us compare the old and new regulations and understand what has changed.
Table of Contents
Can Senior Citizens Take Health Insurance?
The Insurance Regulator & Development Authority of India (IRDAI) repealed 2016 regulations on Health Insurance. In the older regulation, there was an ‘Entry and Exit Age’ clause that said, “Except as provided for in regulation 17(i), all health insurance policies shall ordinarily provide for an entry age of at least up to 65 years.”
Focus on the word ‘all’, which the media missed. That means every health insurance policy has to apply to people of at least up to 65 years of age. Here, the law specifies that there should be an upper age limit of a minimum 65. It can be above 65 as well. Insurance companies can increase it to say, 75 or even 90, if they want. However, 65 has to be the minimum applicable upper limit for all policies.
That means the regulator has not barred anyone from providing health insurance policies to senior citizens.
What’s the New Regulation?
From 1st April 2024, the new regulations kicked in. The new regulation has no ‘Entry and Exit Age’ clause.
That was the reason many concluded that senior citizens could take health insurance policies from now onwards. But this is not true.
The change is that there will be no minimum or maximum age limits. So, the upper age limit of a minimum of 65 will not be applicable from this financial year. That means insurance companies can now set any minimum or maximum age limits. Insurers can tap any age-groups through this change. For example, there can be policies for the age groups 18-40, 40-60, below 30, above 70, etc. The companies will enjoy greater liberty.
Earlier, each policy applied, say, 18-65 or 30-65 age brackets. 65 was the upper limit. But now such restriction has been relaxed.
What happens to senior citizens?
- Those who are insured and in the senior bracket continue to be insured.
- If anything, this impacts the seniors who are scouting for policies after a certain age.
So the impact – practically is nothing.
But People Can Get Excluded
Earlier, people up to 65 got the same policy as a 30-year-old person. Seniors had to pay more premiums because of the age factor.
However, after the new regulation, the insurers can start age-group-specific policies. For example, an insurer can begin policies that cater more to the age group 30-50. So, a 60-year-old will be excluded from such a policy, whereas earlier she could become a part of the same policy. Then, that person will have to be a part of relevant age-group-specific policy. (Note that health insurance policies are lifelong renewables, and these changes will impact only those who want to buy one now.)
But that can happen to any age group. One company can start selling a policy, for example, the 18-30 age group under one policy and 30-50 under another. In such a scenario, the 32-year-old guy will not get the same terms and conditions or benefits of the 18-30 group policy.
Therefore, these relaxations might result in various categories of health insurance policies. However, one should not panic or conclude on anything today. Insurance companies will do the maths and come up with newer and, hopefully, better solutions for all age groups, depending on their needs and risks.
Why It’s Important On Macro Level?
India’s demography is changing. On one hand, we have a large cohort of working age groups. However, that also means that the same cohort will be older after some decades.
People are living longer thanks to medical advancements and economic progress. Even older people don’t want to retire at 60. Similarly, millennials and GenZs have different lifestyles. Remote work, clean eating, and fitness are some of the recent trends that have altered many lives. Therefore, insurers can consider such factors before designing any policy going ahead. They can offer discounts on achieving a health goal with the help of some app. Theoretically, the new regulation will benefit the younger population more, considering lower risks.
The scope is now wide open. So, a more liberalised and open regulation is what I will welcome from this policy where age is no bar.
You can watch Swapnil Karkare explain the truth about health insurance for senior citizens here.
- Senior Citizens To Get Health Insurance? Facts Explained! - Apr 30, 2024
- How Stock Markets React to Interim Budgets: Cues From the History - Jan 31, 2024
- Top 5 Indian Economics Newsletters to Subscribe in 2024 - Dec 6, 2023
