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Deciding how much health insurance you need

Team AckoSept 13, 2023

What might seem adequate today may not be enough for tomorrow. You love your family and want to protect them in case the unlikely happens. Hence, it is essential to consider how much health insurance you need, especially if you have loved ones to support. A health insurance policy can help cover necessary medical expenses — such as planned hospitalisation, medical emergencies, and non-hospitalisation medical care.

The amount of health insurance you purchase should offer broader coverage and the comfort of ample financial protection. In this article, we help you work out how much health cover you might need to protect yourself and your family.

How much health insurance do I need in India?

Contents

How much health insurance do I need in India?
Minimum health insurance coverage
- Takeaway
Frequently asked questions

How much health insurance do I need in India?

Your family and requirements are unique — your health insurance should be too. The cost of a simple heart ailment treatment might cost about Rs. 5 lakhs in present times (depending on where you reside); however, this might not be the case in another 5 or 10 years. One of the first steps to buying health insurance is by deciding how much coverage you will need. Here are some pointers before you decide on the right plan.

Types of health insurance policies: Understand the type of health insurance plans available in the market and then match them with your perceived healthcare requirements. An Individual plan can have less coverage and the Family Floater plan can have more coverage since all members would be sharing the sum insured amount. You need to assess if you need Individual, Family Floater or Senior Citizen health insurance plans and zero in on the suitable plan.
Identify medical costs for potential illness: Critical illnesses such as kidney failure, heart ailments, cancer, stroke, etc., are some of the common potential diseases you might be affected by in the future. Factor in such uncertainties before you decide the sum insured amount of your health plan. You can also opt for a critical illness plan to extend your base plan.
Hospital of your choice: Find health insurance plans that include your preferred hospital among its network hospitals to avail of cashless treatment. Also, check how much is the approximate cost of hospitalisation at your preferred hospital or in your location to understand how much coverage you require.
Evaluate if you have additional health insurance plans: If you hold a Group Insurance offered by your employer, it’ll help you understand the amount of coverage you require for your private or personal health insurance plan.
Family’s medical history: Certain illnesses such as diabetes and hypertension can sometimes be due to hereditary causes. Factor in the possibility of you or your family members who might be affected by hereditary diseases in the future and select the plan that offers the benefit.
Lifestyle: A lot of illnesses that people suffer from are usually caused by bad lifestyle choices. The sedentary lifestyle coupled with unhealthy food habits are major instrumental factors in causing high cholesterol, hypertension, organ failures, diabetes, etc. Even improper sleep habits and stress can trigger lifestyle diseases. You should ensure your health insurance plan will cover such health conditions in future.
Age: There are different age-related illnesses that people can contract as they get older. So, if you need to cover senior citizens such as your parents or parents-in-law, consider buying health insurance that covers illnesses related to older people. However, the possibility of young adults (aged 20-30 years) falling ill is lower. Hence, opt for a health insurance plan that offers sufficient coverage, yet is affordable.
Affordability: Your ability to pay the premium is a vital factor while pondering how much health insurance you need. It is futile to opt for a higher sum insured when you can’t afford it since it attracts a higher premium. Weigh in your affordability and then decide on the plan.
Tax benefits: If you are buying health insurance to avail of tax benefits, evaluate the amount of tax deduction you wish to avail of through the insurance plan and then decide on the plan that suits your need.
Covers high-cost medical treatment: One of the easier ways to determine the right health insurance coverage is that the sum insured should be adequate to provide financial protection for high medical cost treatments such as artery bypass in a hospital of your choice.

Minimum health insurance coverage

A good rule of thumb is to have coverage that’s about 50% of your annual income. So, if you earn Rs. 20 lakhs, a Rs. 10 lakhs health insurance policy may be the right choice for you. However, it is recommended that the minimum coverage should be at least Rs. 5 lakhs, considering the soaring medical costs.

Takeaway

Analyse your unique requirement with the above pointers and opt for an adequate health insurance cover to ensure you and your loved ones are well-protected with a robust health insurance plan.

Frequently asked questions

Here are some of the common queries about health insurance coverage.

When is the right age to buy health insurance?

It is advisable to buy health insurance when you are young. The premium is lower when you purchase health insurance at an early stage of your life, and you can complete any of the specified waiting periods early.

What if I need to change the health insurance coverage later on?

As time passes by, your health conditions might change. Your age, possibility of impact of hereditary illnesses, probably a larger family, or perhaps your financial needs have become more significant, and you want more coverage. You may opt for a plan that can be customised at a later stage of your life, or you can purchase a separate plan to increase the overall health insurance coverage.

Do health insurance plans cover pre-existing diseases?

Several insurance companies might offer health insurance plans that cover pre-existing diseases but may come with a waiting period. Please note that this benefit can vary between insurance companies. It is prudent that you read the terms and conditions carefully before finalising the plan.

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