Health insurance is becoming increasingly important as healthcare costs continue to rise. Health insurance is a type of general insurance that covers the cost of medical care and treatment. It can be provided by private companies or by the government.
Secure your future with the right health insurance sum
With the right health insurance plan, individuals and families can access the care they need without worrying about the financial burden of medical expenses. When it comes to selecting the right sum insured for your health insurance, it’s important to consider your individual needs and budget. While a Rs 20 lakh health insurance policy may provide sufficient coverage for some, others may require a higher sum insured, like a base plan of Rs 25 lakh health insurance policy, to ensure adequate protection against potential medical expenses.
This article will help you with the essential considerations when selecting the correct sum insured for your health insurance policy.
Basics of selecting the right sum insured
The amount of coverage you choose for your health insurance policy should be based on your current health, dependents, their healthcare needs and lifestyle. Before selecting a sum insured, you should assess your current and possibly future medical expenses and adjust the coverage accordingly.
In other words, the sum insured should be enough to cover all the medical costs you may incur in the future, including hospitalisation, medicines, tests, and other treatments.
Here’s a simplified explanation of how it works:
- Choose a policy: Select a health insurance policy that suits your needs, considering factors like coverage, premium, and network hospitals.
- Pay premium: Pay the premium, which is the cost of the policy, to activate your coverage. The premium is determined by age, sum insured, and medical history.
- Coverage: The policy provides coverage for various medical expenses, such as hospitalization, pre- and post-hospitalization costs, and daycare procedures, based on the policy terms. It is always recommended to have a Rs 20 – 25 lakh health insurance policy as it can cover multiple hospitalisations and other major medical expenses in a year.
- Claims: In case of medical expenses, you can claim by either availing cashless treatment at a network hospital or submitting a reimbursement claim for treatment at a non-network hospital.
- Claim settlement: The insurance company verifies and approves the claim and settles the medical expenses per the policy terms, subject to any applicable co-payment or deductible amounts.
- Policy renewal: To maintain continuous coverage, the policy must be renewed periodically, usually annually.
What affects the sum insured?
When selecting the correct sum insured for your health insurance policy, it is essential to consider the following factors:
- Age: Your age is one of the most important factors to consider when selecting a sum insured. Generally, the younger you are, the lower the sum insured you should select. On the other hand, the older you are, the higher the sum insured should be.
- Pre-existing Conditions: If you have any pre-existing medical conditions, it is vital to consider them when selecting the sum insured. The sum insured should be enough to cover the medical costs associated with your pre-existing conditions, including additional tests or treatments. A Rs 20 lakh health insurance policy may be more than enough for a young, healthy individual. He/she can afford to choose even a lower sum insured. But someone with pre-existing medical conditions or a family history of illnesses may require a higher sum insured, such as a base sum of Rs 25 lakh health insurance policy.
- Family Size: The size of your family is also an essential factor to consider when selecting the Sum insured. Larger families tend to have more medical needs and expenses, making it necessary to have higher coverage amounts. A Rs 20 lakh health insurance policy may or may not provide sufficient coverage, if you have a family of five or more, especially children or elderly members who require regular medical attention. In such cases, a relatively higher sum insured, such as a Rs 25 lakh health insurance policy, might be a better sum insured to cover potential medical costs. Furthermore, having multiple family members covered under a single policy can also impact the sum insured required, as the overall medical expenses could be higher.
- Lifestyle: Your lifestyle can also affect the Sum insured you select. For example, if you lead an active lifestyle, you may need to select a higher sum insured to cover any medical costs associated with sports-related injuries.
- Area of Residence: The area of residence can also impact the Sum insured you select. A Rs 20 lakh health insurance policy may provide sufficient coverage for someone living in a low-cost region, but a higher sum insured, such as a 25 lakh health insurance policy, may be necessary for those living in areas with higher medical costs. Ultimately, it’s essential to evaluate the potential medical expenses in the area of residence when deciding on the sum insured to ensure that you have adequate financial protection in case of a medical emergency.
In conclusion, selecting the right sum insured for your health insurance policy requires careful consideration of your individual needs and budget. While a Rs 20 lakh health insurance policy may be sufficient for some individuals, others may require a higher coverage amount. They may go for around 25 lakh health insurance policies and get top-up plans over and above the base plan.
It is essential to assess your healthcare requirements and financial capabilities before making a decision on the sum insured. Keep in mind that medical expenses can be unpredictable and may exceed your coverage limit, leading to out-of-pocket expenses.
Therefore, it’s important to strike a balance between the premium you can afford and the amount of coverage you need to ensure you have adequate financial protection in case of a medical emergency. Ultimately, consulting with an insurance professional can help you make an informed decision on the sum insured that best suit your needs.
Disclaimer – The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.