There are multiple health insurance policy providers in India. People often buy an insurance policy in their limited knowledge. They will either buy it as a tax saving instrument or at best, to cover their hospitalization expenses.

However, before choosing the plan, one should make sure that it is sufficient.

Illustration

Mr. Ram is an employee with an annual income of Rs 10 lakhs. Ram is 35 years old living with his parents, wife and one kid.

Ram buys a health insurance policy for self with an annual insurance coverage of Rs 5 lakhs.

Ram is living in a tier-2 city, say Indore or Bhopal. His 5 lakh annual cover (for self) is likely to meet his treatment expenses.

The average cost for consultation for dengue in Indore is Rs 500. The average hospital stay cost in a big hospital is Rs 5,000 a day (source: Medifee). If a patient requires hospitalisation for dengue, considering it to be a week’s admission, it will cost him Rs 5,000×7= Rs 35,000.

Also, if Ram buys a family cover to cover his wife and kid, the annual coverage will be sufficient. He can at maximum take a family floater cover of Rs 10 lakhs, if he is planning to have a second child.

Ram is living in a metro city, say Delhi or Mumbai. His 5 lakh annual cover (for self) is unlikely to meet his treatment expense.

The average daily cost for admission in a recognised hospital in Mumbai will cost him Rs 10,000 (source: Medifee). If a patient requires hospitalisation for dengue, considering it to be a week’s admission, it will cost him Rs 10,000×7= Rs 70,000. However, these are very conservative estimates. Therefore, the expenses may just grow (manifold).

Also, if Ram buys a family floater cover for his wife and children, the annual coverage will not suffice. He should take a family cover of at least Rs 15 lakh, for his family.

If Ram is susceptible to seasonal diseases, or has a family medical history; he should necessarily opt for Rs 10 lakh insurance coverage.

If Ram has a family history of heart diseases, then Rs 10 lakhs insurance cover is a must. The average cost incurred for heart bypass surgery in India is about Rs 6 lakhs (source: indianhealthguru). He should consider inflation, and the increasing cost of hospitalisation in mind. He can also buy a critical illness policy which will pay a lump sum amount in case he is diagnosed with any critical ailment. Being a breadwinner of the family, this policy will ensure the financial stability of his family despite his medical condition.

Ram should also buy a separate policy for his parents. Their old age and overall treatment expense are important factors. The treatment expense should not be just limited to hospitalisation. It should ideally include pre and post hospitalisation expenses, cost of medicines, preventive check-ups, surgery, medical emergency and OPD visits.

When you need super top-ups

Super top-ups are a workable solution for people who seek higher insurance coverage. It will top-up your standard insurance cover (with a certain amount); by imposing a threshold limit.

For example, if you have Policy 1 and Policy 2. Policy 1 is your standard insurance cover of Rs 5 lakhs and policy 2 is your super top-up cover of Rs 10 lakhs (with a threshold limit of Rs 5 lakhs).

You will get benefits in the following way:

  • If your hospitalisation expense is Rs 3 lakhs (this amount is included in your standard cover)
  • If your hospitalisation expense is Rs 8 lakhs (Rs 5 lakhs will be covered in your standard insurance, and 3 lakhs will be reimbursed by your super top-up cover)
  • If your hospitalisation expense is Rs 10 lakhs (5 lakhs will be covered in your standard insurance, and 5 lakh will be reimbursed by your super top-up cover)

If you have two separate medical bills of Rs 4 lakhs each, the super top-up policy will consider the total of the medical bills, which is Rs 8 lakhs. As the threshold limit, i.e., Rs 5 lakhs is crossed; your super top-up policy will cover your medical bills. It is a great benefit over top-up plans, which consider individual medical bills. Super top-up plans benefit you by increasing your present insurance coverage, on same terms and conditions.

Conclusion

Health insurance is meant to secure you against the soaring medical inflation. Therefore, make sure it is sufficient. An insufficient medical coverage is as harmful as no insurance cover!