What percent of household income should we spend on health insurance premiums?
In today’s modern reality of increasing healthcare costs, having health insurance is essential. A good health insurance plan covers medical expenses for hospitalization, surgeries, and medical treatments. The aim is to find a comprehensive health insurance policy that covers costs at the best premium amount, without burning a hole in your pocket!
When searching for the best health insurance plan and deciding the amount of Sum Insured cover you require, you should begin with assessing individual and/or family requirements. The number of family members and their ages is key in identifying a good policy. We should remember that healthcare costs vary, based on your age and the area you live in. So the premium amount should adjust based on such conditions. Premiums and cover would also increase with every additional insured member in family policies.
Some experts recommend that we should invest about 2-5% of our income in health insurance. Therefore, if we earn say Rs 5 lakhs per annum, we should get a health insurance plan with an annual premium between Rs 10,000 and Rs 25,000. This, of course, is a generic guiding principle. Some key aspects to look at while deciding Sum Insured and premium amounts are age, number of people to be covered, pre-existing conditions, your location and hence hospitalisation costs, and specific health conditions you would like to be covered for.
Rather than waiting for disaster to strike to increase coverage, it is better to get a higher Sum Insured in time. Otherwise, when one is under-insured, it is a big struggle to meet large healthcare costs. To sufficiently provide cover for all insured members, we should opt for plenty of coverage amount within a manageable premium budget. Most personal finance experts recommend a Sum Insured of at least Rs 5 lakhs. Depending on the insurer and policy, your Sum Insured could rise every year if you don’t have a claim. So, for young adults worried about paying premiums that may not be used, there is the benefit that you could enjoy a no-claim bonus or cumulative bonuses.
To help decide the best premium amount and wellness benefits we invite you to visit our health insurance portal, sana.insure. SANA is an online platform that helps you compare health insurance policies in India. We simplify complex terminology, product features, and provide comprehensive information, personalized to your needs.
Wish you a healthy and happy life!