Is health insurance coverage of Rs 3 lakh enough? Or do I need to have a health insurance cover of at least Rs 5 lakh or should it be 10 lakh? This is one question that keeps confusing every health insurance buyer in India. Though most individuals are aware that buying health insurance coverage for self and family is the need of the hour but how much coverage should one take is a mind boggling question.
Having a good health insurance coverage will help in planning your retirement and beyond as a major chunk of expenditure in the older years is healthcare, especially hospitalization.
If you too are confused about the amount of coverage that you need to choose so that you can have a peaceful retired life, do not lose heart, we have some tips that will help you decide the right coverage amount.
Age is an important factor that must be considered while deciding the amount of coverage. For instance if you start at age 25 you can buy health insurance worth Rs 5- 10 lakhs and then increase it by 10- 15 % every year. Buying a health insurance in early life ensures a lower premium as you would have fewer pre exiting diseases.
A middle aged person or any individual who has crossed 45 years needs to buy a higher coverage amount as with growing age the options of buying health insurance decreases. Secondly, the cost of the coverage increase and if the individual develops health issues, the health insurance provider tends to exclude pre exiting diseases which defeats the true reason for buying a health insurance policy.
Affordability is another key feature that helps to determine the amount of coverage. Though you have crossed 40 and you understand the need of having a wider coverage but if you cannot afford the high premiums that need to be paid every year, settle on a lower coverage amount. As any delay in renewing the health insurance policy or nonpayment of the premium would mean discontinuation of the plan. It is very important to buy a policy only to the extent of the amount that you can pay your premium comfortably.
If you are facing cash crunch, go ahead and buy a health insurance policy with a small coverage amount, it will act as a boon at the time of a medical emergency and will help you offset the hospital bill. Do not wait for your financial situation to change, remember you can always increase the coverage amount later.
If you have a family history of lifestyle diseases, the probability of it getting passed on to the next generation is higher. Any individual who is in a genetically high risk category should buy wider health insurance coverage when he is young and healthy.
Lifestyle of a person is an indicative measure to understand the future health. If you lead a sedentary lifestyle, eat out frequently, do not exercise or smoke every day, the chances of developing ailments at a later age is high. Such individuals should always go for wider health insurance coverage.
The health insurance coverage amount also depends upon the type of health insurance plan that you intend to buy.
For instance, if you are family of self + spouse+ kids and you intend to buy a health insurance plans that covers all members under one umbrella i.e. family floater policy, you need to buy a higher sum insured as if you have a family floater policy of a sum insured of Rs 2 lakhs and one member makes a claim of Rs 1 lakh, the sum insured for the rest of the year for all the member would be 1 lakh hence while buying a health insurance, the type of plan is an important factor that determines the coverage amount.
With the medical cost rising big time, anticipating the amount that you would need to spend on medical expenses is difficult. However, your past medical expenses could form a basis of understanding the amount of coverage that you would need. Averaging the amount that you have exhausted on medical expenses in the past 2-3 years can be considered.
For instance, if you have used up to Rs 3 lakh on total medical expenses of the family members, buying a health insurance policy to this extent or higher than this amount can be considered.
Verdict: How much health insurance coverage do you need?
There is no one-size-fits–all rule. Each individual is different and hence his health insurance coverage need is also different, it is important to meet a dedicated health insurance broker who understands your lifestyle and your needs and helps you make a wise decision.