Healthcare is a major expense for senior citizens in India, especially as life expectancy increases and medical inflation outpaces general inflation. The challenge becomes more pressing after retirement, when regular income stops, but health risks grow. For many senior citizens, the question isn’t whether to have health insurance but what type, how much coverage, and whether to stick with insurance or self-fund healthcare needs.
Insurance vs. Self-Funding
Rising premiums are pushing many seniors to rethink their insurance policies. For example, someone who paid ₹25,000 annually for a ₹5 lakh policy a few years ago may now face a premium of ₹50,000 or more for same or less coverage. Such steep increases make it tempting to exit insurance and rely on a dedicated health corpus, especially if hospitalizations have been rare. Self-funding involves setting aside a large sum—anywhere from ₹10 to ₹25 lakh, depending on age, health conditions, and family medical history. This approach offers full control, no claim denials, and no renewals. However, the risk is that one or two major hospitalizations could deplete this fund, especially with the rising incidence of non-communicable diseases like cancer, cardiac issues, and orthopedic surgeries, which can cost several lakhs per episode. On the other hand, health insurance provides peace of mind by preventing fund exhaustion, but it comes with rising premiums, complex terms like co-pay and sub-limits, and the stress of claim rejections or delays. The best approach for many is a balance: retaining some insurance in a cost-effective format while building a modest emergency fund.
Super Top-Up Policies
One cost-effective strategy for senior citizens is buying a super top-up plan along with base policy. A base policy (₹3–5 lakh) covers routine hospitalizations and acts as the deductible threshold for the top-up. The super top-up policy kicks in once cumulative hospitalization costs in a year exceed the deductible, offering large coverage (₹10–20 lakh or more) at a much lower premium than standalone policies .
For example, instead of paying ₹55,000 annually for a ₹5 lakh base policy, one could pay ₹25,000 for a ₹3 lakh base plan and ₹15,000 for a ₹15 lakh super top-up with a ₹3 lakh deductible, providing ₹18 lakh total coverage at a lower cost.
Unlike a regular top-up, which considers individual claims, a super top-up accounts for aggregate claims in a policy year, making it more useful for chronic or recurring conditions. Purchasing both the base and super top-up policies from the same insurer simplifies cashless approvals if the super top-up limit is reached.
Affordable Health Insurance
Health insurance for seniors over 60 is often expensive due to the higher risk of illnesses at this age. Finding an affordable policy with good coverage can be tough, but there are ways to manage costs. Instead of buying comprehensive plans that include extras like maternity, OPD visits, or dental care, seniors should focus on policies designed specifically for their needs. Examples include Oriental Insurance’s Health of Privileged Elders or Star Health’s Senior Citizens Red Carpet Health Insurance Policy. These plans target senior-specific health concerns and usually have more affordable premiums.
Another way to lower costs is choosing a policy with a co-payment clause, where you pay a portion of the hospital bill. This can significantly reduce your premium. However, it can be expensive during major treatments. For instance, if your hospital bill is ₹6 lakh and the co-pay is 20%, you’d need to pay ₹1.2 lakh out-of-pocket. So, while co-pay helps save on premiums, ensure you can afford the extra cost during claims.
Long-Term Policies: Locking in Peace of Mind for 3 Years or More
Wherever possible, opt for multi-year health health insurance policies, preferably for three years or more. These long-term plans protect you from annual premium hike and often come with discounts in premium. Given the volatility in health insurance pricing, locking in a policy for multiple years offers predictability and budget stability.
However, long-term plans require a higher upfront payment, and exiting mid-policy can be complicated if y you’re dissatisfied with the service of insurance company.
Avoiding High-Cost Add-ons: OPD, Room Rent Waivers, and Wellness Packages
Many insurers offer OPD cover, room rent waivers, diagnostic packages, or wellness discounts. While these features sound attractive, they often add significantly to your premium with marginal utility, especially for seniors.
OPD expenses, like consultation fees or basic diagnostics, are usually small and can be managed without insurance. Moreover, the claim process for OPD can be tedious, requiring multiple documents and approvals. It’s wiser to focus on large, unpredictable expenses like surgeries or hospitalization, where insurance provides the most value.
You might see social media posts warning against health insurance policies with room rent caps, but these caps aren’t always bad and can have benefits. A room rent cap, like ₹5,000 per day, helps you save your insurance coverage for important medical costs. Hospital stays are about getting necessary treatment, not staying in a fancy room. Whether you’re in a private suite or a shared room, the doctors, treatments, and surgeries are usually the same. A policy with a room rent cap keeps costs down by avoiding expensive rooms, ensuring your coverage goes toward essential care. Don’t fall for flashy marketing—choose a policy that offers a good balance of affordability and quality care.
Choose the Insurance Company, Not Just the Product
When buying insurance, it’s tempting to focus on policy features—coverage, sum insured, premium—but the insurer’s reputation matters the most. A good product from a poor insurer can leave you stranded during claims. Look for companies with low claim repudiation ratios (less than 5–7%) and check reviews and grievance redressal rates. A policy that looks good on paper but fails during a crisis isn’t worth the premium savings.
Ayushman Bharat PM-JAY (For 70+ Seniors)
The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY) is a game-changer for economically weaker sections, offering ₹5 lakh per family annually for secondary and tertiary care. In some states, it extends to seniors aged 70 and above, even without income limits. This can be a great option for people over 70 who find health insurance premiums hard to afford
However, some large hospitals deny PM-JAY patients admission due to lower payments compared to insured patients and delayed claim settlements by state governments. Still, if eligible, enroll—it can supplement private insurance or serve as a backup in case of claim denials.
Combine Strategies for Optimal Safety
There’s no perfect health insurance plan for seniors, but combining the strategies mentioned above can create a strong healthcare safety net. The best approach is to buy health insurance before age 60 and stay with a trustworthy insurer to build a reliable relationship over time.
Above all one must avoid changing health insurance company after 60 age. While the IRDAI permits porting (switching) health insurance policies, it’s risky after 60. New insurers may require fresh medical tests, impose new waiting periods, or even deny your request. Even if porting is approved, you might lose benefits like cumulative bonuses, coverage for pre-existing conditions, or loyalty perks. Only consider porting if your current insurer repeatedly fails to process claims effectively. Otherwise, it’s safer to stick with the insurer you know.
