How senior citizens’ health insurance space is evolving in India

Policybazaar data shows that senior citizens now account for 18 percent of all health insurance policies.

The senior citizens' health insurance market in India is changing rapidly, with more elderly individuals recognising the need for a financial buffer against the backdrop of rising healthcare costs. This need has driven the burgeoning adoption of health insurance among senior citizens in recent years, a shift that reflects both greater awareness and the impact of industry reforms.

Policybazaar data shows that those aged 60 and above now account for 18 percent of all health insurance policies, a sign that families and individuals alike are prioritising long-term medical security.

The rise and change in senior citizen health cover

The steady steady and significant increase in the number of senior citizens opting for health insurance has been fuelled in large part by a progressive regulatory push from the Insurance Regulatory and Development Authority of India (IRDAI). By removing age caps, reducing waiting periods for pre-existing diseases and introducing universal cashless treatment, the regulator has played a crucial role in making health insurance more accessible and beneficial for the elderly.

One of the most striking trends in senior health insurance is how premiums are funded. At one point, almost all such coverage was provided by the offspring. The data shows that while 73 percent of senior health insurance policies are still paid for by children, 27 percent of the elderly now cover their premiums independently, marking a shift toward financial independence for a growing section of older people. Among those with children overseas, 11 percent receive direct financial support for their health insurance premiums.

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Higher medical costs, larger coverage

The increasing cost of medical treatment has led to a noticeable shift in the sum insured preferences of senior citizens. Close to 73 percent of such persons now opt for policies with coverage of Rs 10 lakh or more, the data showed. This reflects a growing awareness of the financial impact of major medical procedures, including knee and hip replacements, cardiac surgeries and prolonged hospital stays for chronic conditions.

Insurers are addressing this challenge by introducing cumulative bonus features that increase the sum insured annually—sometimes up to seven- or 10-fold over time—without a proportionate rise in premium costs. This ensures that policyholders can maintain high coverage without facing financial strain.

For instance, a plan that starts with Rs 10 lakh in coverage can expand to Rs 70 lakh over five years while keeping the cost per lakh of coverage significantly lower. This approach helps counteract the impact of medical inflation, making long-term healthcare planning more viable for seniors.

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Add-on plans for larger coverage

Beyond basic hospitalisation coverage, senior citizens increasingly choose add-on features that provide additional financial security. In that regard, getting consumables into the ambit of the policy has gained traction, with 85-90 percent of seniors selecting this rider to minimise out-of-pocket expenses on medical supplies such as bandages, catheters and surgical gloves.

The demand for pre-existing disease (PED) waiver riders has also surged, with 61 percent of senior policyholders opting for this benefit to ensure immediate coverage for chronic conditions. Outpatient department (OPD) coverage is also becoming popular, with 30-35 percent of older people including it in their policies to cover regular medical consultations, diagnoses and prescriptions.

These trends indicate a well-informed and proactive approach among seniors, ensuring that their insurance policies are not just a safety net for hospitalisation but a comprehensive financial tool for managing overall healthcare costs.

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Keeping premiums in check

While coverage is essential, affordability remains a key concern. To address this, policyholders can make use of several options.

The cumulative bonus rider, for instance, ensures that the sum insured increases significantly over time, rewarding policyholders for maintaining long-term coverage. Seniors are also increasingly migrating to new-age plans with the same insurer, which allows them to access better benefits at competitive prices without losing continuity advantages. Opting for deductible-based plans has also become a viable strategy, as it helps lower premium costs by sharing a portion of expenses upfront.

Another emerging approach is the selection of hospital network-based coverage, which can reduce premiums by up to 15 percent while still providing access to high-quality healthcare facilities. These strategic choices allow seniors to secure comprehensive coverage without financial burden, reinforcing the idea that effective health insurance is both a necessity and an achievable goal.

The future of senior health insurance in India is not just about increasing adoption rates—it is about ensuring that every senior citizen has access to affordable, comprehensive and hassle-free healthcare. The trends we are witnessing today are just the beginning of a broader shift toward long-term financial and medical security for India's aging population.

The author is the chief business officer, Policybazaar.com.

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