Health insurance cover for retirement should be wide, with limited exclusions

Retirement should ideally give people the time and means to do what they want to do. So, what is planning for it about - Is it about having a steady source of income? Does it involve reducing expenses to deal with reduced income levels? Is it about having enough investments that can be liquidated if the need arises?

There are multiple ways of looking at retirement planning but all involve the following basic steps:

• Define post retirement goals and objectives as early as possible.
• Start saving for retirement with a corpus objective in mind.
• Invest in a manner that balances risk and returns, with decreasing risk as one nears retirement.
• Pay off all debt at least 10 years before planned retirement.
• Keep aside sufficient funds for emergencies.

However, any planning for your sunset years would not be complete unless the individual has planned for healthcare management post retirement. An aging body would mean increased medical expenses.

Adequacy and comprehensiveness of a health insurance product becomes important since the coverage of medical ailments should be as wide as possible with limited exclusions, along with the option of life-long renewability.

Moreover, healthcare costs are bound to inflate year-on-year. Further, due to improved clinical outcomes and testing and advancements in medical sciences, life expectancy has been rising consistently for years. While this is surely good news, it does also present a challenge to someone who is no longer economically active and productive.

It is, therefore, quite important to build a retirement corpus incorporating medical expenses when one is young and healthy. Enroll for an adequately comprehensive health insurance product and remember to be consistent.

Continue renewing the plan year on year to build a history with the insurer. The need for adequacy and comprehensiveness of the chosen product becomes important since the coverage of medical ailments should be as wide as possible with limited exclusions.

Further, a health insurance cover should be available for the 'life term' of the individual concerned. Therefore, life-long renewability becomes a very important consideration while choosing products. Another factor that needs to be kept in mind is whether the insurer is capable of servicing the health product. As the policy is for the long term (considering renewal even for after retirement), then the firm should be able to deliver on their services.

The essential point here is that the ability of any individual to enjoy the retired phase is very closely dependant on the quality of his health. Post retirement, there should not be a situation where the retiree needs to liquidate savings in case of a medical exigency. Often this would mean that money saved for important needs such as children's education, marriage or even funding a retired life will no longer be available, taking away from the quality of life one had planned for so meticulously.

Leading a healthy and happy life is intertwined. Awareness about funding healthcare needs as part of overall retirement planning would go a long way to enable an enjoyable retirement phase in one's life.

Neeraj Basur
Chief Financial Officer, Max Bupa

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