How much Health Insurance do you need.

by Ajit B. Consultant

In the last few decades, rapid developments in medical science has resulted into increased human life span. However, lifestyles diseases increasing day by day , especially in the people living in the cities have become older but today they are not as healthy. The number of accidents is also increasing continuously due to the increasing number of vehicles and in addition lifestyle diseases have started increasing rapidly due to the deterioration of lifestyle. Today, the hospitalization rate has also increased.

Along with this, medical costs are also increasing at the rate of 15% per year, Healthcare is also seeing a steady increase for the last decade. Lack of a health insurance policy due to rising healthcare costs can be risky despite the age of any person. No one can think of when the disease catches him and he is struck by a huge medical bill. If there is no preparation in advance, then once you are admitted in the hospital, the thought of the family budget can easily go wrong. Given these possibilities, it is considered important for you and your family to have a good health insurance policy for health related protection and to to deal with any medical emergency.

Insurance is basic necessity.

It is good to have a good health insurance policy but it is now considered a basic necessity. Similarly, to get the full benefits from a health insurance policy, having an optimal security cover mix is equally important. In India, the maximum insured prefers to take 2-3 lakh security for themselves and a common person takes even less insurance for himself.

While taking the protection of insurance, you also have to take into consideration some reality. Today, even a small surgical procedure costs at least Rs 10,000 – 20000. The cost of a bypass surgery in any good and famous hospital can be in lakhs, which can be even more in the next five years. Today, the insurance cover taken for medical expenses seems appropriate but in the next coming time it may be insufficient for healthcare expenses. Therefore, it is suggested that inflation is also important to keep in mind before determining the sum assured.

What is a right amount to take into consideration when taking online health insurance? When determining the right amount for insurance cover, it is very important to keep in mind various factors like types of hospital hospital you would prefer to be treated, the age of you and your family member, existing health condition and ability to bear your expenses. Medical costs usually also depend on the nature of the hospital and facilities taken. It may vary for different hospital in same city. Therefore, the sum insured in your health insurance policy should be determined based on your income and lifestyle.

Thumb rule for coverage amount

While there is no ideal amount for a person’s health insurance sum insured, yet two market-based rules have been made in this context:

First, your health insurance coverage amount should be at least 50% of your total annual income. And second, insurance cover must be at least equal to the cost of coronary artery bypass graft in the hospital of your choice. Most private financial experts recommend insurance cover of at least 5 lakhs. You can take a family floater for the same amount of insurance for your family members.

Due to the increasing cost of medicines and treatment, the security of your personal health insurance policy may fall short of meeting all expenses. The expenses incurred during the normal health insurance policy recovery time such as total nursing care, counseling session, rehabilitation etc. may not be included. But you can also increase your health protection by giving your premium insurance policy with the help of tools like riders and top ups, without paying extra premium.

A rider is an add-on that gives you additional benefits. Rider hospitalization expenses normally found with a health insurance policy, but are available only after the end of the last limit available in the name of the exemption. The rebates are not actually covered by the insurance company and are paid by the insurer itself. The exemption provision makes top-up plans slightly cheaper as the small amount of claim under this is not paid by the insurance company. In the event of a serious illness , the cost of your initial treatment may be only Rs 5 lakh or more and for this you may need top up cover.