Do you have enough health insurance for Retirement?

Do you have enough health insurance for Retirement?

One may not realise it in one's younger, prime years but health insurance is at the time of retirement is something of massive importance.

Naval Goel
Try and recall, for a minute, the very first job you had. Yes, that job where you were a twenty-something nobody, eager to impress, all for that slimy little paycheque of meagre proportions. And the minute the monthly salary would be transferred to your account? That night was yet another party; another splurge-fest, be it on your friends, family or romantic date. Before you zone off, smiling at the awkward memories, think for a moment about how much you managed to save on a monthly basis back in those days.

Clearly, saving for the future had been the very last thing on most people's minds at the time of their first job. And saving for health insurance at the time of retirement would have been even farther away from one's thoughts.

Why worry about health insurance for retirement today?
One may not realise it in one's younger, prime years but health insurance is at the time of retirement is something of massive importance. No matter how fit we are during our youth, our body is bound to age with time and our health will gradually deteriorate. The relative expense on the health of a 60 year old will be much higher than that on the health of a 26 year old, at any given point of time.

Add to this the fact that healthcare costs are undeniably going to increase manifold with the passage of time and you have yourself staring in the face of a major financial crisis at the time of retirement. One would need to have enough money stocked up for the health problems one would face at the time of retirement, along with a trustworthy health insurance plan for retirement.

What should I do?
Begin with building a proper retirement corpus at a young age, factoring in the inflated health care costs at the time of retirement. The first and foremost thing you need to do after the realisation of the gravity of health insurance at the time of retirement is start saving today. Immaterial of how young you may be, the sooner you start to save, the better it is because you can save comparatively smaller proportions of your salary as you have more time to accumulate the savings.

Also, with savings lying in the retirement fund for more time, the interest income of the saving will be higher, thanks to compounding. To tackle the question of how much you would need to save for the safe-guarding of your future health, consider the present expense scenario of expenses. Assume the rise in costs for the next few years and keep on adding 10-15 % to it. Another very important requirement is to research the ideal health insurance plan for you, keeping in mind retirement benefits, and investing in the right plan.

Consider various important factors during this research such as the long-term renewability of the health plan, reputation of the insurance provider and ability of the insurance provider to meet your health needs at the time of retirement. Renew this health insurance policy year after year to build a level of trust with the insurance provider so they can be a fall-back for you during the days you most need one.

The basic idea here is that at the time of retirement, the block of savings you have kept aside for all purposes other than health insurance and health emergencies, such as for funding your retired life, for purchasing that beautiful sea-facing house or for your children's weddings should be wholly and solely used for its particular purpose itself.

It should not have to be liquidated to fund a health emergency that you suffered from because the money saved up for emergencies and health insurance at the time of retirement has run out or because your health insurance provider has been unable to service you at the crucial point of your life when you most need it. Work on some research yourself without leaving it all to the insurance provider. Study about the diseases that could be caused due to the lifestyle you follow, research about any possible hereditary diseases you may contract and factor in the threat of outrunning the retirement corpus designed by you.

The Health Insurance Plan

The first thing to keep in mind is to start investing in a comprehensive health insurance plan as early as possible because the later you put it off to, the more premium you would have to pay and the lesser sum assured you will receive by the insurance provider in the occurrence of any covered event.

Even if one is retiring, it is good to opt for a health insurance so that it can cover your pre-existing illnesses once the cover provided by your employer seizes to be active post retirement. By opting for top-up cover, one can further enhance the coverage of one's policy. Go for a health insurance plan which covers death benefits as well and consider the pre and post hospitalization coverage of the plan.

Also keep in mind the age at which you wish to or plan to or are compelled to retire, say by virtue of your profession, while picking the right health insurance policy for your retirement years. Needless to say, do not forget to factor in your spouse's health coverage requirements while picking your own.

After all, you will have to be the one paying for their health as well! Finally, one more matter of grave importance to keep in mind is that in spite of having invested in the most comprehensive, comfortable and ideal health insurance plan, you will still have various other health expenses which will not be covered by any health insurance provider in India.

To take an example, most health insurance policies of insurance providers in India (and abroad, for that matter) provide pre and post hospitalization cover for a period of 60 and 30 days respectively but there is no guarantee that you would be out and about of the hospital within that time period. Also, health insurance providers in India provide coverage only for curative and not for preventive prescription drugs or for any voluntary procedures you might wish to have done.

Most of them do not cover dental medical problems either. It would be wise, therefore to make sure you or your spouse are not caught off-guard during your retirement years and therefore, it is very essential that you set aside some savings for these expenses as well. Save well today to live a healthy and happy tomorrow.

By Naval Goel, Founder,