How Much Health Insurance Do You Need? Here’s Your answer
by Abdul Aziz Mondal Insurance Published on: 20 December 2021 Last Updated on: 06 April 2022
Health insurance is a contract between you and your insurance provider that in lieu of a small policy premium towards a particular sum insured, the insurer shall compensate you for any medical casualties arising to you. Simple right? But many people get confused as to how much health insurance do they need?
The amount of the policy should be enough to enjoy health insurance benefits, and at the same time, it should be so much that it becomes affordable.
Do You Know The Risks Of Being Underinsured?
Thousands of people lost their lives in the COVID pandemic because they did not have enough insurance to cover their medical expenses. Hence, a medical insurance plan must be sufficient, especially in such risky times.
Even while more people are acquiring health insurance coverage for the things that matter to them, underinsurance remains a significant problem. Individuals feel they have appropriate insurance coverage until they file a claim and learn differently due to misplaced information and a lack of awareness.
What Does It Mean To Be Underinsured?
Being underinsured in a medical insurance plan can come in a couple of forms. For example, you buy health insurance of 5 Lakh, and you find yourself to be sufficiently secured.
However, in 5 years, the value of 5 lakhs won’t remain the same. In another instance, when it comes to unexpected medical bills, you choose a health insurance coverage that covers you up to Rs 20 lakhs.
You believe that such a vast sum of money can cover any condition or illness. However, you didn’t recognize when you got the policy that it didn’t cover critical conditions like cancer because you weren’t aware of the exclusion.
How Do I Avoid The Risks Of Underinsurance?
There are certain crucial steps to follow that ensure risks of getting insecure health insurance:
1. Make A Diligent Assessment Of Your Needs
When getting a health insurance policy, you should first assess your needs before proceeding with the purchase. Bear in mind that inflation, as well as the likelihood of unanticipated expenses, must be included.
1. Opt For A Sufficient Sum Insured
Always check that the money insured is sufficient for your needs. You may have to pay a greater premium for this service, but it is well worth it. You should not be forced to shoulder the whole burden of a costly financial catastrophe down the line.
3. Go Through The Exclusions And Conditions Thoroughly
You should closely study the T&C and the exclusions of the different types of health insurance plans when you opt for any policy from a renowned insurance provider. This will ensure that you do not end up in an unhelpful situation in the future.
4. Seek Professional Health When In Doubt
When it comes to selecting the appropriate insurance coverage, it is always preferable to rely on the experience of insurance companies rather than on unreliable sources.
You can take the help of an agent or a trustable health insurance platform.
5. Find A Cashless Hospitalization Network From Top Hospitals
In most cases, when you end up in a hospital that is not a network hospital under your medical insurance plan, you shall end up paying the money in cash first-hand before your insurer reimburses you.
And if you do not possess enough savings at the time, it can lead you into severe financial trouble. Hence, always look for a network hospital.
6. Examine The Plan’s Waiting Period, Co-Payment, And Exclusions
The waiting period operates like a hibernation period during which no claims are permitted. However, it is applicable only in the case of pre-existing illness. The phase of hibernation might extend between two and four years.
By and large, the shorter the wait time, the better. Additionally, keep an eye out for the health insurance co-payment clause, which refers to the portion of the claim for which you are responsible for payment. Co-payments are most frequently encountered in programs for senior citizens or those with disabilities.
7. Identify Benefits that Enhance your Sum Assured
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No Claim Bonus (NCB) to enhance sum insured
You receive an NCB on your sum insured (which can range up to 20 percent), for every year you do not make a claim. Hence, you can, over time, accumulate NCB to increase the sum insured of your health insurance by almost 100%.
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Restoration of additional coverage
In this case, if you were to consume all of your sum insured for a hospitalization/treatment, the insurer may provide you with additional coverage without taking any additional premium. Many insurers have different policies regarding the same. Ensure to read the policy documents well or connect with the insurance company to gain complete insight.
How Much Is Health Insurance Required For An Individual?
It is advisable to have a minimum medical health insurance policy of Rs 3 lakh or more. This takes care of your health in case you meet a casualty in the near future.
Since you are young and healthy, you shall have an excellent opportunity to accumulate your NCB and increase your sum insured by 100% or more over time.
How Much Is Health Insurance Needed For A Family?
Family health insurance plans are designed in a way that fulfills the requirement of protecting your entire family. A higher policy amount is recommended since the covered people are more in number.
For 2 adults and 2 children, a health insurance policy of Rs10 lakh is a good amount to start at. If you have more members in your family, it is advised that you go for a higher sum insured.
Health Insurance For Senior Citizens Or Parents
The inflating costs of treatment lead to a big chunk of money going out at the time of hospitalization. Bypass surgery may go well above Rs2 lakh if the wrong time strikes.
Hence, ensure the needs and criticality of the person’s health before opting for a medical insurance plan. You should look into a critical illness insurance plan if the person has been battling a disease for a long time and hospitalization is expected soon.
Conclusion
The costs of treatment and the emergence of viruses have made it essential for us to be more aware and prepared for fighting illnesses. A group health insurance can help you cover you and your colleagues if you are in an office set up as well.
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