Deciding How Much Health Insurance Coverage You Need

Now that you know about health insurance and why they are necessary for you, you must decide how much health insurance coverage you need. Various kinds of health insurance plans exist in the market, and picking the right one for you can be stressful. Individual health insurances, family floaters, senior citizen health insurances, etc., can intimidate a first-time insurance applicant at first glance.


Age, the status of your health, your annual income, your preferred medical institution, etc. become crucial determining factors in deciding how much coverage you need. Hence, it is very important for anyone to thoroughly research and understand how much insurance coverage you need before buying your health insurance.

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Overview of Health Insurance Plans in India

Since there exist several health insurance plans in the market today, selecting a plan for yourself may seem daunting. While there exist generic health insurance plans designed to cater to a wide number of medical crises, some plans have been designed to pander to expenses arising from specific diseases that individuals might be diagnosed with like cancer and diabetes. Now, while different factors impact the likelihood of a given individual developing a serious medical condition, it is important to understand how to select a health insurance plan that provides you with adequate coverage. Continue reading to understand how to do so.

How Much Health Insurance is Required for an Individual

If you happen to be in your mid to late 20s, you may not suffer from any pressing health conditions. This makes the time ripe to consider purchasing a comprehensive health insurance plan that features out-patient department (or OPD) coverage. By selecting a health insurance plan that permits you to enhance your coverage in line with your age, as well as, the current inflation rate, you can lay the grounds to get financial assistance in case of a medical emergency.

 

After taking into account your lifestyle as well as your long-term plans, you can select a sum insured in health insurance that suits you along with key add-ons that provide you with additional coverage. Popular riders that are often selected include maternity coverage, accidental death rider and critical illness rider.

How Much Health Insurance is Needed for a Family

If you have dependents such as a spouse and children, availing of a family floater plan is recommended. This is because it features a coverage amount that can help financially secure any risks that your dependents may incur without any trouble. This kind of plan enables your family members to take advantage of health insurance benefits. Add-on riders that are popular for such a health insurance plan include newborn cover and maternity cover.

How Much Health Insurance Do You Need for Senior Citizens or Your Parents

It isn’t unusual to include your parents in your family floater plan. That being said, if your parents are over 60 years old, it makes more sense to purchase a senior citizen health insurance policy that is tailored to satisfy their health insurance requirements. If you do add your parents to your family floater plan, you run the risk of driving up the cost of your premium considerably. Selecting a suitable plan that boasts of features and benefits that help cover health risks that your parents might be exposed to is a far better alternative.

Is There Ever a Right Amount of Coverage That One Needs to Look At?

The right amount of coverage is dependent on a number of factors like age, health conditions and the kind of hospital you prefer. Healthcare costs vary to a large extent depending upon the hospital and facilities you select.

 

Let’s look at an example about a knee replacement surgery. While the cost associated with choosing a domestically made implant will cost you x, the cost associated with using an imported plant is nearly 2x. Income and lifestyle are important factors that one must consider when discerning what their health insurance coverage ought to be.

 

Although there is no right amount of coverage applicable to a given health insurance policy, there exist two rules one must consider when calculating what the right amount ought to be.

 

  1. Firstly, health coverage should amount to at least 50 percent of your annual income.

  2. Secondly, the insurance coverage should be able to offset the cost of a coronary artery bypass graft in the hospital of your choice.

 

Given the rising costs of medical treatment and medicines, individual health insurance coverage may fall short of covering all medical expenses. Enhancing health coverage with riders and top-ups can help offset these costs.

What Does Being Underinsured Mean?

Lifestyle changes have increased the need for a health insurance plan. Although more individuals are in the market to avail of health insurance plans in India today, the instances of individuals being underinsured have also risen. As far as most people are concerned, the process of purchasing health insurance comes to a close once they have selected the plan of their choice and paid the premium applicable to it.

 

That being said, only once they raise a claim against their policy, do they realise whether or not their coverage is sufficient. Given what medical expenses amount to today, being underinsured is almost akin to being uninsured. Listed below are the two ways in which individuals may be underinsured.

1. Having an Inadequate Sum Insured

Despite owning the right health insurance plan you may find that the sum insured is low. This may arise if your future requirements have been inaccurately assessed. Also, certain policyholders may have voluntarily opted for less coverage to pay lower premiums.

2. Having Inadequate Coverage

In this scenario, the policyholder may have purchased a health insurance plan that features a sufficient amount of sum insured. However, he (or she) may only realise at the time they raise a claim that the said policy doesn’t extend coverage towards certain critical ailments. This scenario can arise if the policyholder hasn’t done adequate research before purchasing his insurance policy. This highlights the importance of reading the fine print before buying a health insurance policy.

How Can You Avoid the Risks of Being Underinsured

To avoid the risk of being underinsured, follow the steps mentioned below which will help you avail of sufficient health insurance coverage.

 

  • Take a look at and assess your current financial situation. This involves you taking into account your lifestyle, habits and family medical history before purchasing a health insurance plan.

  • Make it a point to read the fine print of a health insurance plan. Exclusions and conditions must be taken into account before buying a health insurance plan.

  • Select a sum insured amount that is more than enough to provide coverage for you and your dependents. Ideally, this figure should amount to 30 to 50 times your current annual income.

  • Don’t hesitate to reach out to the concerned insurer and have your queries about your health insurance terms and conditions addressed.

Factors to Consider While Opting for Health Insurance

When selecting an appropriate health insurance plan, you must always take into account the following factors.

  • Medical History

Your current health condition along with your family’s medical history play an important rolewhen selecting a health insurance plan. Certain health complications are taken into account by insurance providers when determining the risk associated with insuring an individual. Certain insurance providers may offer to provide coverage for pre-existing conditions only after a predefined waiting period in health insurance has passed. Else, they may choose to exclude such conditions from the policy. Opting for a comprehensive health insurance plan is particularly important if you suffer from a disease or have a history of family illness. It is recommended that you don’t conceal any details from your insurance provider as it may lead to your claim being rejected in the future.

  • Age

Today's affordable health insurance premium plans encourage young people to invest in health insurance. This means you can enjoy the benefits of a low premium-high coverage plan as a twenty something. Also, it is also possible to complete the waiting period in time to safeguard your health.

  • Premium Amount

The higher the sum insured, the higher the premium. While other factors are also taken into account at the time the premium is determined, you must only select a plan that you can afford to pay. If you haven’t begun earning a salary yet it may not be feasible for you to pay a high premium. The premium amount must also help you decide whether to opt for an individual health insurance plan for yourself and your dependents or a family floater plan. Ensure that you have sufficient coverage so that you can cover your healthcare expenses in case of an emergency.

  • Annual Income

Insurance providers take into account your annual income when determining what insurance coverage you will be eligible to avail of. It is recommended that you select the maximum sum insured available to you that is appropriate for your insurance needs. In case you are purchasing a family floater plan you must take into account your family members’ considerations and set them against your income.

  • Tax Benefits

Tax benefits apply to health insurance plans as per section 80D of the Income Tax Act of 1961. These benefits entitle you to make a claim on the premium you paid towards your policy with a cap amounting to INR 25,000 provided you, your parents or spouse fall below the age of 60. If you are a senior citizen, this claim is capped at INR 30,000. You can plan your insurance coverage accordingly in order to avail these tax benefits.

Conclusion

After having read this article, you should be well versed with the merits associated with availing adequate coverage under your health insurance plan. It is recommended that you evaluate your insurance requirements and assess your health insurance plan with regularity such that you are familiar with your coverage. If you would like to learn more about health insurance plans that provide comprehensive coverage, visit the Bajaj MARKETS website.

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Frequently Asked Questions

  • ✔️ Do I really need a health insurance plan?

    A health plan is a must with the rising healthcare costs as you can avail cashless benefit in health insurance. Apart from this, you can get coverage for daycare treatment, pre and post hospitalisation, domiciliary treatment, daily cash, alternative treatment, ambulance cover and more!

  • ✔️Do health plans cover pre-existing diseases?

    You can find numerous insurance providers who cover pre-existing illnesses but there might be a fixed waiting period applicable before you can make any claims. However, you must note that this can vary from one insurer to another.

  • ✔️Which health insurance policy is better?

    Every type of health insurance policy is good as long as you pick the right sum insured and purchase insurance from a trusted insurer. By referring to the Claim Settlement Ratio (CSR) and Incurred Claim Ratio (ICR), you can select a reputable insurance company that will help you in your time of need. So, head over to Finserv MARKETS now to buy a comprehensive health plan!

  • ✔️When is the best age to buy health insurance?

    It is recommended to buy medical insurance as soon as you start your first job. This allows you to enjoy lower premiums and complete the waiting period early. 

  • ✔️How can I purchase health insurance online at Finserv MARKETS?

    You can follow the steps below to buy health insurance online:

    • Go to the ‘Health Insurance’ section in Finserv MARKETS

    • Select the type of health insurance you want to get

    • Fill in the required information in the application form

    • Add riders for extensive coverage

    • Review the policy terms

    • Pay the premium online

    • You shall receive the health insurance policy document on your registered email ID