Having a health insurance plan has become a necessity rather than a choice due to skyrocketing medical expenses in India. It not only provides coverage against various illnesses and conditions but also safeguards one’s financial future.
However, the question is, how much health insurance is required in India. There is no exact formula to determine how much health insurance coverage you need, unlike life insurance. The appropriate health insurance coverage varies from one person to the other. Therefore, in this post, we will help you work out the right coverage amount for your health insurance policy.
Factors To Decide On How Much Health Insurance Do You Need
Here are some of the most important factors that you should consider while deciding on how much health cover you need to protect yourself and your family members:
- Identify Your Potential Illnesses & Their Costs
Some of the common possible diseases you can contract in the future include critical illnesses like kidney failure, cancer, heart conditions, stroke, etc. You should always consider these illnesses before deciding the total level of coverage for your health plan. To supplement your basic coverage, you can also choose a critical illness plan.
- Evaluate Your Family’s Medical History
There are strong possibilities that the subsequent generations may develop the disease if obesity, diabetes, or any other similar lifestyle disease runs in your family. So having the appropriate health insurance is crucial. The insurer will review the health history of your family members to assess the likelihood that the insured would experience the same issues. High-risk individuals really do need to purchase a thorough, high-coverage health insurance policy.
- Consider The Type Of Health Insurance
Explore the plethora of health insurance options available in the market, and then match them to your anticipated healthcare needs. Other than standard health insurance, there are several additional kinds of coverage. To choose the best plan, you must determine if you require Individual, Family Floater, or Senior Citizen health insurance.
- Focus On Your Hospital Choice
The standard of the hospital you pick to be admitted to also has an impact on the health insurance coverage. The cost of the same treatment varies amongst hospitals. Therefore, the amount of health insurance coverage required must be calculated by adding up any potential costs at the hospital of your choice.
To access cashless treatment, look for health insurance plans that include your desired hospital among their network of hospitals. Additionally, to determine how much coverage you need, find out the general cost of hospitalization at the hospital of your choice or in your area.
- Consider Your Age
Another significant aspect that will influence your health insurance coverage is age. Young people who purchase health insurance coverage receive a discount on the premium. In your 20s, you often do not require a substantial cover. Consider purchasing health insurance for yourself in the range of Rs. 2,00,000 to Rs. 3,00,000; as you approach your 30s and 40s, you may gradually raise your coverage.
You should take into account the age, way of life, and health of your parents, husband, and children if you need to purchase health insurance for them. As people age, they may develop a variety of ailments related to their age. Therefore, if you need to provide for elderly family members like your parents or in-laws, think about purchasing health insurance that covers illnesses associated with older people. However, the likelihood of illness in young adults is lower. Therefore, choose a health insurance plan that provides adequate coverage while remaining reasonably priced.
- Check If You Have Any Additional Plan
It is very important to check whether or not you have any additional health insurance plans. If you have group insurance via your company, knowing how much coverage you need for a private or individual health insurance plan will be easier.
- Analyze Your Lifestyle
Do you lead a healthy lifestyle? Or do you lead a stressful life, lack time to work out, or consume an unhealthy diet? It could be challenging to maintain a regular workout program and you might have to eat unhealthy foods if your job requires frequent travel. In these situations, having a substantial level of health coverage is crucial because such a lifestyle can cause hypertension, organ failures, high cholesterol, diabetes, etc. Make sure your health insurance policy will continue to provide coverage for these conditions in the future.
- Check Your Affordability
The cost of health insurance is a significant factor. Consider your financial situation when determining how much health insurance you require. It’s crucial to have a substantial amount when you’re in your 40s or 50s. However, if you are short of money, it is still preferable to purchase a smaller policy because any financial support during a medical emergency is beneficial. Therefore, it is advisable to consider your financial situation before selecting a plan.
Minimum Health Insurance Coverage In India – Thumb Rule!
The appropriate amount of coverage relies on a number of criteria, including your preferred hospital, your present age and health status, the age and health of your family members, your budget, etc. However, a good rule of thumb is to get coverage that equals roughly 50% of your annual income. An Rs. 20 lakh health insurance coverage may be the best option for you if your annual income is Rs. 40 lakhs. But, given the rising expense of healthcare, it is advised that the minimum coverage be at least Rs. 5 lakhs.
How Much Health Insurance Is Needed For An Individual?
A person should always choose a health cover that is equal to half of their annual salary while buying a health insurance plan in their early years of life. It needs to be more than Rs. 3 lakhs. This will assist them in obtaining the crucial insurance to cover any medical bills that may arise.
Additionally, since you have a low likelihood of filing a claim when you are young, you are more likely to receive a no-claim bonus or cumulative bonus, which causes your total insured to increase by up to 200 percent annually.
How Much Health Insurance Is Needed For A Family?
You can never predict when an illness will strike and leave you facing significant medical debt. Unprepared families may have their carefully planned budget upset by even one hospitalization. Health insurance coverage is essential to protect you and your family from any emergency medical situations in the face of such possibilities.
To get the most out of a health insurance policy, having the right balance of coverage is equally crucial. If your family consists of 2 adults and 2 children, choose at least an amount insured of Rs. 10 lakhs. In India, the majority of policyholders insure their families for an average of Rs 7-9 lakhs because each family shares the common sum covered.
How Much Health Insurance Is Needed For A Senior Citizen Or Parents?
If your parents are elderly, they will undoubtedly require a higher insurance payout, and the premium as well would be high given their age. Therefore, when deciding on the degree of coverage, you must be more practical.
Nowadays, the price of even a minor, common surgical treatment can easily reach Rs. 1,00,000. At a reputable hospital, a bypass operation costs more than Rs 2 lakh now, and the price will undoubtedly increase over the following five years. A sum insured that seems reasonable today might not be enough to pay for your medical costs in a few years. Therefore, always prefer to choose a higher sum insured if you are covering any senior citizen in your plan.
To Sum Up
Health insurance plans act as a savior in cases of a health crisis. However, in order to manage healthcare costs conveniently, one should be aware of the amount of health insurance coverage they need. Use the aforementioned advice to analyze your individual needs and choose a sufficient health insurance plan to safeguard you and your loved ones from financial ruin.
