Go for Rs 1 crore health insurance. Here’s why

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With the outbreak of a pandemic, the cost of medical treatment has risen recently. What’s more, stress, long work hours and unhealthy food habits are triggering the rise in incidences of critical illnesses. This makes health insurance an important part of your portfolio, as a single hospitalisation can drain out your life savings. But even if you are among the ones who are insured, will the sum insured be sufficient when you actually need it? This is because the average sum insured of the health insurance policy is around Rs 3-5 lakh and looking at how the healthcare costs are rising, it might not be enough at the time of need. So if you want to buy insurance for higher amount, there are a few options. One can you buy basic policies with high coverage or you can go for a top-up plan. Here is a lowdown on both the options:

Higher Sum Insured Policies

A common false perception in India is that a family-floater policy with Rs 7-10 lakh sum insured is enough to take care of the medical needs of a family. But many find themselves in a situation where they exhaust their life savings on their treatment, and even borrow to cover the cost. So, many experts say that having a health insurance policy with a sum assured of Rs 5-10 lakh might not be enough to cover most serious ailments. In fact, this amount may not cover the treatment of critical illnesses even today as they usually cost up to Rs 30-40 lakh in India. According to data shared by Policybazaar towards the end of 2019, the penetration of high sum insured policies (Rs 1 crore cover) was at 2% which has grown to 35% at present, suggesting how awareness around high sum insured covers has picked up.

Amit Chhabra, Head-Health Insurance, Policybazaar.com said, “If one takes into account the medical inflation, which is increasing at double the rate of overall inflation, this cost is expected to double in 9-10 years. Given these odds, it only makes sense to have a higher sum assured as part of your health insurance policy. Rs 1 cr0re health insurance policies are not costly. The premium for Rs 1 crore health cover policies may cost you Rs 500-600 more than the Rs 10 lakh sum insured plans but it will give you higher coverage compared to Rs 10 lakh plan. Some of these Rs 1 crore policies are designed as a combination of a base plan coupled with a super top-up, which substantially brings down the premium for such policies.”

Top-Up Plans

You can also go for a combination of the basic and top-up plan. Under a top-up plan, the coverage starts after the exhaustion of the deductible. Deductible means a particular limit of hospitalisation cost after which the policy gets triggered. If you opt for it go for super top-up plans as they consider aggregate claims per policy year and not a single hospitalization.

Therefore, while buying the health insurance policy compare both the high sum insured plan with the combination of the basic and top-up plan.