How To Determine How Much Health Insurance I Need?


The rising costs of medical treatment have made having health insurance absolutely indispensable these days. Without this coverage, your savings may not suffice for a sudden illness that necessitates hospitalisation and further medical care. And, when it comes to getting proper medical attention, we cannot skimp on the quality.

Now, it is extremely important to not only have health insurance but also stay covered for the right sum insured. This might make you wonder – how do I select the correct amount of coverage?

A valid question indeed.

In this article, we will take you through a few tips that will help you arrive at a correct assessment of the sum you need to be covered for in health insurance.

  • Review your needs

As simple as this step might sound, it is actually the most important one. Start off by reviewing your expectations of medical insurance. When conducting this review take into account factors such as the cost of healthcare in your city, the rates of room rent and treatment at the hospital you prefer, and medical inflation.

You also need to take into consideration any pre-existing diseases you may have. If you have certain illnesses that might see you more likely to make a claim, you might want a higher sum insured. Now, most insurers place a waiting period before you can make a claim for pre-existing illnesses and by the time this waiting period is up, the costs of healthcare too might increase substantially. So, it is always better to opt for a higher sum insured than have lesser coverage than what you may need.

  • Consider your age

In your 20s, health insurance premiums will be very cheap. As you grow older, you will find your premiums increasing due to age-related loading. However, this increase should not lead to you being underinsured. In your mid-20s, a health insurance policy of about Rs 3 lakhs to Rs 5 lakhs might suffice. However, 10 years down the line, you may need much more coverage. Make sure to increase your basic sum insured each year by at least around 10%.

Did you know – If you do not make claims on your health insurance for a given year, you should automatically get a no-claims bonus in the form of increased coverage at no extra cost to you.

  • Check affordability

Now, buying a health insurance policy of Rs 30 lakhs may not be within everyone’s budget. But that does not mean that you need to be underinsured. Simple review your finances and take the maximum health insurance that you can afford. This is the best way to ensure that you have sufficient coverage, if the need arises. For instance, if you are in your mid-30s, a health insurance policy of around Rs 10 lakhs should suffice. However, if you can stretch your coverage to around Rs 15 lakhs, you may consider doing so. Afterall, we never know when the need arises. Remember that your health insurance helps protect your hard-earned savings. So, always choose the highest coverage you can comfortably afford, while keeping in mind your other financial obligations.

Finally, you might also want to review the coverage you have from other health insurance plans, if any. For instance, if you are in your early 20s, your parents may still have you covered in a family floater plan. Or, your employer might have you covered in a group health insurance plan. Do consider the benefits of these forms of coverage, note their limitations, and buy your individual insurance policy accordingly.

We hope that this article will help you get the health insurance coverage you need.

Take care.

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