Bangalore: Buying medical insurance by the elderly has both pros and cons, reports Neha Pandey Deoras of Business Standard. However, the drawbacks are more.

Despite the Insurance Regulatory and Development Authority (IRDA) making medical insurance ‘age free’ for the elderly, senior citizens still shirk away from this scheme as it is very costly. For people over 70 years of age, the premium on a 5 lakh policy is nearly 60,000 to 80,000 per year. This is so because the elderly are hospitalized more often. They have to pay the premium whether they use the insurance or not. The only up-side of this policy is that they get better discounts on claim-free years. The premium is fixed for age groups, like – 35 to 40 years, 40 to 45 years and so on. Sumeet Vaid, Certified financial planner, does not approve of this policy. He says, "Few choices in the market exist for senior citizens. Those that do exist, charge high premiums. Instead, work on building a corpus based on your and family's needs." He further said, "You need to back-calculate according to your age and allocate money. Higher the age, higher the allocation."

So, if one is 50 and wants to accumulate 15 lakh by 65 years of age, one will have to save 5 lakh for every 5 years till the designated period is over. This instigates people to save a very big share of their retirement money for medical insurance, which needs a lot of financial planning and effort. This might not be a cup of tea for all people. Also, people are advised to save 10 lakh for corpus, if they have 50 lakh as retirement money. Out of this 10 lakh, half can be invested in safe instruments while remaining in high growth instruments.

However, the situation becomes problematic when one doesn’t know as to how much to save and how much to invest. Kartik Jhaveri, of Transcend Consulting says, "You never know when you will be hospitalized or the disease you will suffer from or the money to be required." Since, insurance schemes, along with corpus, may or may not foot big bills; Jhaveri vouches for both, medical insurance scheme and hospitalization corpus. He puts forth a cheaper way, saying, "Get covered by a family floater or with your children's employer to save on the huge premium. But, corporate covers ask for co-payment of 10 to 20 percent of the bill, again not an easy amount."

Gaurav Mashruwala, provides the middle path here, saying, "If you are paying 50,000 to 60,000 for a 10-lakh cover, it is worth it. But, if you pay this for less than 5 lakh, it may not make sense. Also, factor in the no-claim bonus."

A few tips people can follow here are – starting to save early and regularly keeping aside a small amount for insurance, if starting late; one needs to set a target to save every year to reach the designated amount and if one has not saved at all, then one needs to save a portion of retirement money. Another alternative would be getting insured from the family insurance of children.