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Money & relationships: Preparing yourself and parents financially for their medical expense

Here’s how to financially prepare yourself and your parents for medical problems and emergencies that they may face after retirement.

, ET Bureau|
Oct 07, 2019, 06.30 AM IST
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If, for some reason, you and your parents are unable to buy an insurance plan, make sure you maintain a sufficient buffer for eventualities.
If your parents are set to retire in a few years or are on the verge of quitting work, it is crucial to ensure that they are financially prepared for their medical needs.

Given the increasing health-care costs, rising medical inflation of 15-20% annually, and the likelihood of worsening health problems in old age, it is imperative that they secure their finances when it comes to medical preparedness.

  • Talk with parents
Have a discussion with your parents about their existing medical conditions, the size of health insurance that they have, if any, and if they are maintaining a medical buffer or emergency corpus. Find out the expenditure they are likely to incur after retirement and the cover or corpus they should have handy. If they have prepared well for their retirement, and have sufficient insurance and accessible cash, find out the details of the TPA, insurance documents, and ways to access medical corpus, when needed.

  • Buy health insurance
If the parents’ financial condition does not allow them to secure their medical needs, buy a health cover for them. There are several plans for senior citizens in the market, which cover pre-existing diseases and specific ailments after the waiting period, and do not require medical check-ups. Take a plan of at least Rs 5 lakh, if possible. However, these can come with high premiums and if these seem too formidable, opt for a small cover of, say, Rs 3 lakh and a bigger top-up plan of, say, Rs 10-15 lakh, which will be cheaper. You can also claim tax benefit of Rs 50,000 under Section 80D for the premium you pay for them if they are above 60 years.

  • Employer’s cover
If your employer provides a group health plan that has a provision of covering parents and in-laws, avail of the maximum limit available, even if there is a co-payment clause. This is because such plans are heavily subsidised and you could retain these for your parents. For yourself, buy an independent family floater plan, which will be much cheaper given your younger age.

  • Medical buffer
If, for some reason, you and your parents are unable to buy an insurance plan, make sure you maintain a sufficient buffer for eventualities. If their financial condition doesn’t allow them to build such a corpus, you should keep a bigger emergency corpus, which includes a medical buffer, before you start investing for your goals. This will ensure you don’t have to dip into your corpus for other goals, and they don’t have to depend on relatives or friends for emergencies.

  • Be prepared for emergencies
Besides financial readiness, you need to have a plan in place for emergencies. Your parents should have the mobile numbers of ambulances, regular doctors and hospitals on their speed dial, besides your number. The insurance and medical documents or cash should be kept in a pre-determined location to be accessed easily. You should also have their neighbours’ numbers handy.

If you have a wealth whine, write to us...
All of us have been in a financial dilemma when it comes to relationships. How do you say no to a friend who wants you to invest in his new business venture? Should you take a loan from your married brother? Are you concerned about your wife’s impulse buying? If you have any such concerns that are hard to resolve, write in to us at etwealth@timesgroup.com with ‘Wealth Whines’ as the subject.

Disclaimer
The advice in this column is not from a licensed healthcare professional and should not be construed as psychological counselling, therapy or medical advice. ET Wealth and the writer will not be responsible for the outcome of the suggestions made in the column.

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