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Post By Shraddha Gala
Pro Tips to Manage Parents' Healthcare Expenses after Age 65
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Manage Parents Healthcare Expenses, Sr. Citizens
One of the biggest satisfactions in life is to be able to give something back to your parents when they have given so much to you.
— Dwight Gooden
We understand your care and concern for your parents when it’s time to manage their healthcare expenses once they become senior citizens. With depleting energy and income, it is hard to look for investment avenues that can maximize the returns of your parents’ retirement corpus while combating inflation.
The best way to ease this worry and show your affection is to offer financial gifts or deploy strategies that can reduce their fiscal burden, optimize returns, and offer safety of capital.
In this article, we have suggested a few Pro Tips to manage your parents’ healthcare expenses after they cross 65 years of age. Let’s begin!
Buy a Proper Health Insurance Plan
With medical inflation growing at 12-14% per annum in India, the cost of healthcare is increasing year on year. Buying a health plan can solve half your problems. With a health insurance plan that will take care of the expenses incurred during medical contingencies, you can be rest assured that your parents would get the best medical treatment without any sort of delays or hassles at the reception of hospitals.
However, before you set out to buy a health plan, make sure you consider the following factors:
- Parents’ age
- Coverage
- Waiting periods
- Premiums
- OPD benefits
- Sub-limits
- Co-payment (important)
To understand these terms in detail, read up here: Things to consider before buying health insurance for senior citizens.
Our Formula – Basic Health Cover + Top-up Cover
When it comes to health plans, OneInsure has found a smart way out for you. Using the health plan + top-up formula, you can get higher health coverage for more affordable rates. Here is a quick quote to help you understand better.
For instance, instead of buying a normal family-floater health plan with coverage of Rs 10 lakhs, which costs close to Rs 25,000 per year, choose the OneInsure way and opt for the following:
- Buy a family-floater health plan with coverage of Rs 5 lakhs at close to Rs 14,200 per year along with a family-floater top-up plan with a coverage of Rs 10 lakhs with deductible of Rs 5 lakhs at close to Rs 5,800 per year.
- By doing this, you and your family get higher coverage of Rs 15 lakhs at close to Rs 20,000 (14,200 +5,800) per year instead of paying Rs 25,000 for lower coverage of Rs 10 lakhs.
- You save close to Rs 5,000 every year!
Note that dependent parents can be made a part of your family-floater health plan.
Build a Buffer – Maintain an Emergency Cash Account
Another to-do to manage your parents’ healthcare expenses is to maintain an emergency financial buffer. A dedicated bank account must be assigned as your emergency cash account. This money should not be touched unless in a medical emergency.
Ensure the bank interest rate is on the higher side and also that you transact at least once a month through this account to keep it active. Your emergency cash must be at least 6 – 8 times your monthly salary.
This account should be with a well-distributed bank so that in case of emergencies you can easily find an ATM to withdraw cash from.
If you wish to have a joint account with your spouse/parents, it should be the emergency cash account because it will allow all holders quick access to this cash in case of an emergency.
Manage Your Parent’s Portfolio at an 80:20 Ratio
With growing age, financial responsibilities are bound to increase and one can no longer invest only in equity SIPs because of their risky nature. Investments need to be diversified at this stage and higher priority needs to be given to debt instruments like Guaranteed Income plans, FDs, and so on.
Therefore, we suggest you diversify your parents’ portfolio in the ratio 80:20, where:
- 80% of their funds are in debt funds (government funds), which are a source of regular income that meets their liquidity needs.
- 20% in equity funds (risk-based funds) to build a corpus and help beat inflation.
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Don’t wait until it’s too late!
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(Source credits: Economic Times)
