A few years back, Fernandez retired after a 30-year stint in a leading private bank. He thought he had saved enough for retirement. Shortly after, an emergency hospitalisation resulted in a hefty medical bill, shaving a bit of his retirement corpus.

Protecting one’s finances after retirement and indemnifying against an unexpected health expense is essential.

How do we do that? Here are the steps:

1. Seek a separate health cover

Group insurance health cover ceases to exist the moment you resign. So, if you have a group cover provided by your employer, you can move to an individual cover on retiring without losing on the continuity benefits. However, ensure there are no sub-limits or exclusions of diseases. 

If you are covered under a family-floater policy, go solo. Usually, the premiums for health policies are determined based on the age of the eldest family member, and the higher the age, the higher the premium. Going separate also helps reduce tax deductions under Sec 80D of the IT Act for those adopting the old tax regime.

Medical expenses for critical illnesses, including cardiovascular diseases, cancer, kidney failure, and paralysis, are high. Since senior citizens are prone to certain critical illnesses, ensure these diseases are covered and with an adequate sum assured. 

2. Go Comprehensive

Special senior health policies are customised for old age requirements and can be renewed until ripe old age, unlike a standard policy. This is especially useful when there is a high risk of developing a chronic ailment. 

Most special senior policies come at a lower premium than standard policies but with the requirement of co-payment. Under co-payment, you pay a part of the bill each time there is a claim – say 20 or 30% of it. 

If you don’t have any significant illness, choose a comprehensive health cover that comes without any limit on room rent or co-payments. Here, you also get the flexibility to customize the coverage amount to suit your specific healthcare needs. 

For instance, if you have a family history that puts you at a high risk of certain critical diseases, you can opt for high coverage for such ailments.

3. Put on your glasses and read the fine print

It is not just about buying the cheapest insurance. Look at the policy documents to know the sub-limits, co-payments, and room rent caps.

For instance, the premium for a 60-plus senior citizen might work out to Rs 60,000 a year for a sum assured of Rs 5 lakh in a standard health policy. But then, if you opt for co-pay the annual premium reduces to 45,000. So in the case of co-pay, you might have to shell out 20-50% of the hospitalization bill. 

Similarly, the daily room rent of a hospital might have a cap. For instance, in a Rs 5 lakh cover, daily room rent could be capped at 1% of the sum assured or Rs 5,000 a day.

Having no caps on room rents gives the freedom of choice to choose hospitals as well as the rooms (economy, deluxe, etc) of your choice while undergoing treatment. 

4. Review your insurance requirement periodically

Medical inflation is galloping at 12-18% annually. So, every five to six years, you must ensure your medical cover keeps up with the times. In addition, if you have contracted specific illnesses, you need to provide additional cover for them. 

With advances in medical technology, many treatments and surgeries are getting done through daycare procedures. So, ensure you choose a senior citizen policy that covers daycare procedures like dialysis, cataract surgery, radiotherapy, etc.

Domiciliary hospitalisation coverage is another crucial factor. Often, an elderly patient’s health condition may not allow him to be admitted to a hospital. In such cases, they could be treated at home under the supervision of a qualified doctor if there is a domiciliary hospitalisation cover.

5. Consider top-ups and super-top-ups

Top-up plans kick in on a per-claim basis and if the claim amounts are more than the deductible. 

However, such claims are applicable only once a year. In contrast, super top-up policies pay the amount even in case of multiple claims within a policy year once you have exceeded the deductible threshold. 

Does the insured risk getting hospitalised frequently and having poor health? Are they prone to critical illness/accidents? If the answer is affirmative, super top-ups might be a better option, even though it comes at a cost.

While super top-up has its financial benefits, it comes at a cost. As a result, its premiums are usually higher than that of top-ups. 

6. Keep in mind some other factors

Some policies cease once you turn 60 or 65 years of age. Instead, opt for a policy with lifetime renewability. 

If a policyholder has a pre-existing illness, the senior citizen policies still provide cover after a waiting period that varies from one year to five years. Ensure you opt for a policy with the least waiting period. 


After retirement, go solo to keep premium costs lower, periodically review the extent of health coverage and provide for newly contracted ailments, if any.