In today’s unpredictable times, health insurance isn’t just an alternative now; it has actually become an essential necessity of life. Considering the rate at which healthcare and medical costs in the country are increasing, it is only an insurance policy that can save you from paying the exorbitant bills that any such situation could incur.
That said, most people often find themselves in a quandary when it comes to deciding just how much health insurance coverage they need. This is a far trickier conundrum than it might seem. Common sense would dictate that one should avail the best coverage as far as possible. However, the trade-off to this view is that expenses, incurred by premiums, too are a factor. Moreover, some people might buy health insurance online of a very advanced category without realizing all its potential benefits.
So, what is the ideal way to calculate the ideal coverage that your health insurance plan should provide? Let’s look at all that matters before you go ahead and pick a suitable health insurance plan here.
The Importance of Adequate Coverage
It is easy enough to understand that low coverage insurance is obviously a no-go, by default. If you are to buy health insurance online, and if you end up saving on premiums by opting for this, you are also compromising on coverage that can be so useful. When any medical emergency or crisis arises, you will feel the pinch of a low coverage cashless health insurance plan. The financial compensation provided by the plan could be only a small fraction of the total cost incurred.
On the other hand, adequate insurance coverage will help you pay for all the expenses and contingencies as given below:
Thus, it can be said that a family or an individual health insurance policy with adequate coverage would instantly erase all your worries and hassles.
But again, ADEQUATE doesn’t necessarily mean BIG, which isn’t useful in any sense, and for which you end up paying only extravagant sums of money in the form of premiums.
So, before we get to how you arrive at the right figure, let’s understand just what’s happening in healthcare in terms of rising costs.
Why is Healthcare Expensive Today?
There are two major factors as to why you might find most healthcare and medical services much more expensive today than they were about a decade ago. One of these factors is directly related to your place of residence. In general, healthcare and medical services are more expensive in the key metropolitan cities of the country, such as Mumbai, Delhi, Gurgaon, Bengaluru and Chennai. In contrast, the same in Tier-2 cities such as Jaipur, Lucknow, Nagpur and Coimbatore would be significantly less expensive. And the same applies to Tier-3 cities.
Higher costs in metropolitan cities are directly linked to high income levels, indicating a higher affordability for the same, as well as other factors such as higher proportion of property rates and high prices for amenities. But at least in Tier-1 cities, people have access to more facilities; conversely, in Tier-2 or Tier-3 cities, there aren’t enough alternatives or facilities available to the people. Thus, there is a steady growth of demand for medical care in these regions, and this is driving prices to rise further.
Will Prices Rise Further?
As a country, India has the dubious reputation of witnessing a rapid surge in healthcare costs. The annual rate is around 10% to 14% as of now and it can be safely predicted that this will only increase in the next decade. For example, if a surgery would cost anything between ?5 to ?7 lakhs today, it could cost anything between ?12 to 17 lakhs in the coming ten years. And so, what might seem affordable now would be astronomical tomorrow.
All these factors point to the fact that you need adequate coverage when choosing from the best health insurance plans in India.
Age and Health Conditions
Generally, different age groups will have different requirements of insurance coverage. If you happen to be in the age group of 18 to 30 years, a cover of anything between ?10 and ?15 lakhs would suffice. This rises at an even rate till the age bracket of 45 to 60 years. Now, your requirements would increase drastically, anywhere between ?20 and ?50 lakhs. This is because, between these age limits, an individual would be more vulnerable to ailments and health complications. Once you have crossed 60 years of age, your requirement increases further to even an insurance cover of ?75 lakhs.
Apart from age, your health profile plays a crucial part too. If you have any of the following conditions or develop them either from a young age or as you grow older, you qualify for higher insurance coverage by default.
Choosing between Individual and Family Floater Insurance
Depending on whether you live alone or with a family, or even with a small family or a large one, you need to choose between an individual health insurance policy and a family floater health insurance plan. Both have their respective advantages and drawbacks, as explained here, but both work specifically for unique scenarios too.
If you happen to be a single individual, an individual policy with a cover of anything between ?10 lakhs or ?12 lakhs would suffice.
If you are married, without children, either 2 individual policies or a family floater with a cover of anything between ?10 lakhs and ?15 lakhs.
If you are married and have a child or even two children, a family floater with a larger cover of ?12 lakhs to ?15 lakhs would work.
Finally, if you are married, have a family of your own and are also living with parents, you would need to buy not only a family floater policy but also choose a senior citizen health insurance plan. It would also be advisable to have a top-up health insurance plan handy just in case of unforeseen emergencies. This works out to be cost-effective too as you can top up a low coverage plan of, say, ?5 lakhs with an additional coverage of ?10 lakhs at a moderate premium rate.
Mistakes to Avoid
A common mistake that some make is to depend entirely on employer benefits for health insurance coverage. Since there is no absolute certainty of an individual working for many years at a stretch in an organisation, employer benefits such as health insurance plans for family are nullified when an employee resigns from the organisation. Thus, these insurance benefits are never permanent and are also, in many cases, insufficient.
Every insurance plan needs to be reviewed yearly and if there are any economical or convenient upgrades or top-ups in store, they must be availed without the slightest delay.
Waiting periods too are worth factoring. An insurance plan can give you the best possible coverage but it can have a waiting period whose duration nullifies the effect completely, So, make sure you understand how it works and check this detail before buying a policy.
Your health insurance can also qualify you to avail for tax benefits under Section 80D of the Income Tax act. To understand this better, you can read up here how this works out for you.
Most importantly, buying insurance late is never an advisable option, since premiums will only get more expensive as you age. So, start early to get the best possible coverage at the best premium.
The Final Word
Health insurance is an absolutely essential need for today’s unpredictable times. If you follow some of the advice given above and even do some calculations on your own, you can certainly arrive at a reliable estimate of the ideal health insurance coverage you need. This will help you make the right choice when buying a policy from here.
Health Insurance Disclaimers
The information provided in this article is for general informational and educational purposes only. It does not constitute financial, legal, investment, or medical advice. Health insurance premiums, coverage limits, exclusions, and terms vary significantly based on a wide range of individual underwriting factors. These factors include, but are not limited to, age, biological sex, tobacco or nicotine use, geographic location, pre-existing medical conditions, family medical history, choice of deductible, and the specific insurance carrier or plan design selected.
The cost estimates, projections, and scenarios discussed in this article—including those for individuals, family floaters, married couples, and other demographic differences—are illustrative examples based on historical data or market averages available at the time of writing. They do not represent guaranteed quotes, binding offers, or fixed pricing from any insurance provider.
Insurance regulations and policy terms are subject to frequent change. While we strive to ensure the accuracy and reliability of the information presented, we make no representations, warranties, or guarantees, express or implied, regarding the completeness, accuracy, reliability, suitability, or availability of the figures or concepts discussed herein.
Purchasing health insurance is a critical decision that impacts both your financial health and medical care. You should not rely solely on the information in this article to make insurance purchasing decisions. Before buying, modifying, or canceling any health insurance policy, you must consult with a licensed insurance broker, certified financial planner, or an authorised representative of a licensed insurance carrier to obtain a personalised quote tailored to your specific demographics, health status, and coverage needs.
By reading this article, you acknowledge and agree that the author and/or Mirae Asset Sharekhan shall not be held liable for any financial losses, denial of insurance claims, or legal disputes arising from your reliance on the information provided in this content.
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