With high charges for insurance, India is no country for old men

BENGALURU: Sridhar Yahambaram, 65, and his wife Margatha, 60, were taken aback when their health insurer of 22 years suddenly increased their premium by 70%. The childless couple in Bengaluru discovered that the annual renewal cost for their individual health insurance policy jumped from ?7,550 to ?12,835.

Because they subsist on pension, and barely make it through each month after meeting household expenses, paying rent, medical bills and consultation charges for his rheumatoid arthritis and her asthma, they say they may discontinue the policy.

“The insurance doesn’t pay for my consultations, pills and treatment. We bought this policy so we are covered for things like major surgery or accidents,” Sridhar said. Many insurance policies, particularly older ones, do not cover outpatient treatment.

Sarosh Barucha, 84, says United India Insurance Co increased the cost of his 70-year-old wife’s individual health policy by 114%. “The premium was ?9,647 for many years but this time, when we renewed the policy, we had to pay ?20,621,” he said. “United India is a government-owned company. Is this the way the government treats an old couple? We live on interest, which reduces as our expenses increase.”

A salaried professional with employer-provided insurance says he discontinued his mother’s Mediclaim policy when she turned 79. “The premium became a large chunk of the ?3-lakh cover even though there were no claims for over a decade,” he said. Activists say the Insurance Regulatory and Development Authority of India should take cognisance of this because it is unfair to hike charges for senior citizens whose incomes reduce or are limited, even as their expenses increase.

“Whatever insurance companies charge is approved by IRDAI,” said R Sankariah, insurance activist and industry veteran. “Every product has to be filed with the regulator, including the premium hike.” Experts say insurers often do not warn customers beforehand of price hikes and customers, unaware of regulations, are helpless. “Insurers can’t hike premiums without the written consent of senior citizens,” said Sudha Ramanujam, who works with the office of the insurance ombudsman in Chennai.

The ombudsman has penalised insurers multiple times for failure to warn customers and for not explaining options available to older people. “Insurance companies are supposed to sit with senior citizens and discuss their options,” Sudha said. “If a senior citizen cannot afford a premium increase, the company should allow him to migrate to another plan or to port to a different firm. They cannot arbitrarily send notices to elderly people. We receive a lot of complaints from senior citizens about this.”

Insurers, for their part, say the issue is not as simple as it seems because premiums are calculated based on past claims, average life expectancy, consumer inflation and medical inflation among other things. “It would be shocking if a person who has not made claims for a decade, between when he was 69 and 79, is suddenly told that his premium has doubled,” said Rashmi Nandargi, head of retail health, PA and travel underwriting at Bajaj Allianz General Insurance. “But it is not a decision taken at an individual’s level. The rates insurers charge are based on the age band, geography and gender. If a certain age band, say, 60-70, has higher claims, the premium goes up for all policyholders in that age band — including the 79-yearold who hasn’t filed a single claim.”

Insurers also say it can be slightly cheaper for senior citizens to take a base policy and then a top-up for better coverage. “If a senior citizen wants medical coverage of ?10 lakh, the premium would be ?17,000,” Nandargi said. “But if he were to take up a base policy of ?5 lakh (premium ?12,000) and get a top-up ?5 lakh cover (?2,600), the premium would be lower.” Insurance firms also say it is up to the government to make things more affordable for seniors. “The government should give senior citizens more tax breaks,” said Sanjay Datta, chief of underwriting claims at ICICI Lombard. “But unaffordability of healthcare for seniors is a social issue.”

Insurers say older people have more ailments so it’s a matter of prudential underwriting. “Senior citizens are more likely to have cataract, lung diseases, respiratory ailments, knee cap surgeries, etc, so they are charged more,” Datta said. “But it is possible for seniors to break up their risk with comprehensive indemnity cover from a general insurer and a critical illness plan from a life insurer.”

Source: The Times of India