Having a health insurance plan in place is essential if you wish to protect yourself and your family against exorbitant hospital bills in case of medical emergencies. Moreover, worrying about paying the very high medical bills while seeking treatment can be counterproductive as patients need not only physical rest but also mental relaxation. Medical inflation has been on the rise in India over the past few years and the cost of hospitalization even for minor procedures have become very expensive. In order to guarantee financial safety, it has become extremely important for individuals and families to have health insurance.
However, buying the right health insurance plan that can keep you and your family covered against any medical emergencies can be a difficult task. The most important aspect that you need to consider while buying a health insurance policy is the amount of sum insured you may require. Sum insured refers to the maximum amount of money that the insurance provider will payout in case of a health insurance claim. For instance, if your medical bill comes up to ₹15 lakh and your health insurance policy has a maximum sum insured of ₹10 lakh, then you will only receive ₹10 lakh from your insurer as your health claim. You will have to pay the remaining ₹5 lakh out of pocket. This is why it is essential to pick the right sum insured so that you do not end up paying large amounts of money out of pocket despite having a health policy.
As a general recommendation, it is advised that individuals must have minimum health coverage or a sum insured of at least 50% of their annual income or ₹5 lakh, whichever is higher. For people living in metropolitan regions, the minimum sum insured should be around ₹10 lakh. Ideally, a maximum sum insured of ₹25 lakh with a top-up health insurance plan of ₹10 lakh-₹20 lakh should keep you covered against most medical expenses, even in the high cost of living areas.
Factors to Consider When Choosing Sum Insured
Here are some important factors you must keep in mind at the time of buying health insurance so you can choose an adequate sum insured:
● Type of Health Plans
Understanding the different types of health policies and their coverage will allow you to understand the kind of features and sum insured offered and at which price. Then you can evaluate the amount of sum insured you require and get a plan that offers the highest coverage and benefits. If you are looking to get insurance for your whole family, a family floater health insurance is the right choice. If you want to get insurance for your elderly parents, senior citizens’ health insurance should be the way to go.
● Calculate your Necessary Sum Insured
You can calculate the sum insured you might need by estimating the treatment costs of common diseases, critical illnesses and accidents at hospitals in your city or town. Generally, people living in small towns will have lower medical costs compared to people living in metropolitan cities.
● Consider Corporate Insurance
If your employer already provides you with a group or corporate insurance, then you can lower your chosen sum insured as some of the medical expenses will be covered by your company-provided health plan.
● Consider Family History of Disease
Many diseases are hereditary, meaning they can be passed on from your parents to you. If your parents have a history of genetic diseases, you will need to factor in the expenses for those possible illnesses in the future. Moreover, you will also need to consider if you are predisposed to medical conditions like heart disease, diabetes, etc.
● Number of People to be Insured
If you are looking to get health insurance for your whole family, you will need to consider how much sum insured each of your family members needs and then select the sum insured for the family plan accordingly.
● Consider Your Budget
You should also take into consideration how much money you can afford towards health insurance and then choose a plan with the highest sum insured and benefits that your budget allows. You can check out the cost of different health plans using the online premium calculator for health insurance.
All the above points will give you a good idea about how much sum insured you should opt for when buying a health insurance policy. More importantly, consider all the inclusions and exclusions of the plan carefully and look at all the health care benefits offered. You can also compare the benefits of different health plans available online and then select a plan that suits your specific needs while providing an adequate sum insured.