What Are the Drawbacks Of Including Your Parents In Your Existing Health Insurance Policy?

Although it may be tempting to include all the members of your family, including your parents under the umbrella of the same health insurance policy, it is not prudent to do so. Let us understand why that is the case with the help of an example.

Ms Vedika, aged 35 years, purchased a family floater health insurance policy with a sum insured of ₹25 lakhs. She included her husband, Agastya, her parents, Maithili and Ranjan, and her four-year-old daughter Raina, under the coverage of the plan.

Here are some of the challenges she faced because of the decision to include her parents in the same health insurance policy as herself and her husband and daughter:

1.Higher Health Insurance Premium: Since both of Vedika's parents were above the age of 60 years and hence prone to an increased risk of a wide gamut of diseases, the premium of the health insurance policy ended up being much higher than what she had initially envisaged.
Had she opted for a Family Floater Health Insurance Policy for herself, Agastya, and Raina and a Senior Citizen Health Insurance Plan for her parents instead, the overall premium would've been lower and the coverage would've been better aligned with the specific requirements of the elderly.

2.Insufficient Coverage For All Members of the Family: During the third year of the policy, Vedika's father, Ranjan, was diagnosed with an advanced stage of lung cancer. The resultant treatment involved multiple surgeries and chemotherapy, not to mention the cost of medicines and other necessary healthcare equipment. Owing to the fact that Vedika had had the foresight to purchase a health insurance policy with a critical illness cover, the cost of the treatment got covered under the plan.

However, her husband met with a severe accident later that year, which required major surgery on his legs. Since more than 90 per cent of the sum insured under her family floater health insurance policy had been used to cover her father's treatment, Vedika had to resort to delving into one of her Fixed Deposits to ensure that her husband's treatment expenses and subsequent recovery were financially secured.

Had Vedika selected a family floater health insurance policy for herself, her husband, and daughter, and a separate critical illness health insurance policy for her parents, she would have likely had sufficient medical insurance coverage for all of the aforementioned people. And there would have been no necessity for her savings to be disturbed due to insufficient coverage in the wake of multiple simultaneous medical emergencies.

3.The Impact on The No-claim Bonus of The Health Insurance Policy: For every policy year that passes without you filing a health insurance claim, you get rewarded with a No-claim Bonus. This bonus can be utilised at the time of the renewal of your health insurance policy to increase the sum insured and/or receive a discount on the new premium obligation.

Since Vedika had already filed two claims during a single policy year, one each for her father's treatment for cancer and her husband's surgery (to the extent of the remaining sum insured in her health insurance plan), she could not earn any No-claim Bonus on her health insurance policy for that policy year.

Once her father's treatment course for cancer had been completed, Vedika decided not to renew her family floater health insurance policy the following year. She had learned from her experiences and understood the various complications that were intertwined with the inclusion of one's parents in one's health insurance policy.

She went back to the drawing board and started her search for suitable health insurance policies afresh. After carrying out thorough research on the subject, Vedika decided to purchase a Senior Citizen Health Insurance Plan for her parents and a Family Floater Health Insurance Policy for herself, Agastya, and Raina.

Not only did the above decision entail a higher overall sum insured for all involved, but it also meant that the overall expenditure on health insurance premium was lower. In addition to this, she could rest assured with the fact that even if there was the requirement of filing a health insurance claim in any policy year, the other policy could remain untouched and the associated No-claim Bonus could be preserved.

The above example can help you answer the question of 'how to choose health insurance for your parents'. If you are looking for one of the best medical insurance policies for your parents in India, then you must check out Tata AIG's Senior Citizen Health Insurance Plan, a plan that offers comprehensive coverage to people above the age of 60 years.

Owing to the various disadvantages that including your parents in your existing health insurance policy entails, you must refrain from doing so. It is, instead, advisable to opt for a Senior Citizen Health Insurance Plan for your parents, which has been designed keeping in mind the various ailments particular to old age.

Selecting a suitable basic health insurance policy does not suffice to protect you or your parents from the financial burden of all types of health-related risks. Therefore, you must also consider a critical illness insurance cover and a COVID-19 insurance plan. You can check out the various health insurance policies offered by Tata AIG on our official website.

Disclaimer:

All the people mentioned in this article are fictional and the example that has been cited has been incorporated as a case study. Any resemblance to a real case or person is purely coincidental and completely unintended.