Recently, during my conversation with a new NRI client, she revealed her plans to eventually return and retire in India. Upon further enquiry, I discovered she had a corporate health cover abroad but had discontinued her health insurance policy back home.
This, unfortunately, is a very common mistake among NRIs.
After settling abroad, many NRIs gradually lose touch with their financial priorities back home, especially health insurance.
The repercussions of this oversight could be huge, particularly during retirement, when medical expenses can significantly erode a carefully built finite corpus. Further, it becomes expensive to buy a fresh health policy with passing age and may even be rejected if there is any adverse medical history.
Which is what exactly happened in my client’s case, now in her early 40s. I advised her to buy a fresh independent personal cover in India. During the mandatory telephonic health underwriting, the insurer discovered that she had been diagnosed with rheumatoid arthritis five years ago. Her policy was rejected outright. This was despite the condition not being active and despite her clearing the relevant medical tests.
Rheumatoid arthritis is an auto-immune condition and many insurers are cautious about covering such risks. Even if they do, it it often comes with permanent exclusions, high waiting periods, or restricted benefits.
This case highlights an important lesson: health insurance should ideally be purchased when one is healthy and continued without interruption.
NRIs who are certain about returning to India should make it a priority to continue their Indian health insurance policies, even while living abroad. This cover will be most critical in their later years, when premiums are high and medical underwriting is stringent. Post 40 or 50, the cost of fresh health cover rises sharply, and any medical history can significantly reduce acceptance chances.
Life is unpredictable. Even if the future appears distant or uncertain, having a layer of financial protection in India through health insurance is essential. While foreign social security systems and employer-provided health covers are helpful, they may not cover all severe medical conditions – especially once employment ends or if one relocates permanently. Although medical treatment in India is relatively affordable compared to many countries, major illnesses can still place a substantial financial burden on retirement savings in the absence of a health policy.
Remember, savings and investments are not enough to secure financial future. Health insurance is the most effective tool to protect them in retirement. Along with your peace of mind!