Health insurance has evolved in India with a range of plan options with different features and specifications. Today, there are health plans suitable for individuals, couples, young families, senior citizens and even people with heart diseases and diabetes. Amidst all the choices, it is easy to get confused. One of the first things to consider is identifying the amount of coverage that is ideal for you or your family, commonly known as Sum Assured or Sum Insured.
Sum Insured explained
The Sum Insured is the maximum coverage amount of your health insurance policy in a year, up to which your insurer will pay for medical expenses and claims. The Sum Insured amount will cover compensation for expenditure incurred by you towards medical treatment, as per the terms in your health insurance plan. Any amount spent beyond the Sum Insured will have to be borne by you. As healthcare costs are on the rise and also vary significantly by treatments undergone, having an adequate minimum Sum Insured is a crucial decision.
Example - Suppose your Sum Insured is Rs. 3 lakhs, and you are hospitalized twice in a period of 12 months. In the first incident your hospital bill is Rs. 80 thousand. In the second incident your hospital expenses are Rs. 2.5 Lakhs. Hence, your total hospital bill for the year is Rs. 3.3 Lakhs. The insurance company will pay only Rs. 3 Lakhs of this amount, while the remaining Rs. 30 thousand would have to be paid by you. Also do remember – the insurance company will pay only for those medical conditions or treatments that are covered by your health insurance plan. E.g. if Rs 30,000 of the above bill was for dental work that is not covered in your policy, it would not be paid.
How to decide what is an adequate Base Sum Insured amount
Before deciding the Sum Insured amount, one should assess criteria like medical history, current health conditions, life-stage, family profile and the extent of coverage you are able to afford.
- Current health conditions: Your medical history, will have an effect on the Sum Insured. Any pre-existing conditions or diseases, such as diabetes, hypertension, etc., or any illness or surgery undergone in the past also has a direct link to the Sum Insured to be taken.
- Demographics: Your age and gender would affect the ideal sum Insured amount. It is beneficial to buy health insurance at a young age, as you would pay a lesser premium for a higher Sum Insured amount. The older one gets, the propensity to need medical attention increases, therefore a higher coverage amount is required. Gender also plays an important role since female-oriented health needs and concerns (maternity, reproductive health conditions) may require greater coverage.
- Health Habits: Lifestyle, diet choices and stress levels influence one’s health needs in the course of time. Habits such as heavy consumption of alcohol and tobacco could lead to grave health concerns. These health concerns may need more expensive treatment, so a higher Sum Insured would be required. It is important to consider your lifestyle and health habits, when deciding on the amount of coverage under your health insurance plan.
- Metros versus non-metros: Location determines the cost of hospitalization and medical expenses. Typically, people residing in metro cities ought to get a higher Sum Insured than those from non-metro cities.
- Family profile: When deciding the Sum Insured, consider your family profile too. Does it make sense to include your elderly parents in your family health insurance plan? Or should you purchase separate health insurance for them? When making such decisions an influencing factor is ensuring each family member has a sufficient Sum Insured for present and future medical needs.
- Types of health insurance: There are many types of health insurance plans available in India that cater to universal as well as specific needs. These include individual health plans, family floater plans, maternity-oriented plans, senior citizen plans, and critical illness plans. The category of plan selected will also affect the ideal Sum Insured.
Based on the factors shared above, you could assess various plans to decide the minimum suitable Sum Insured for your base plan. At SANA.Insure we understand and analyse requirements, such as ideal Sum Insured, when suggesting health insurance plans. You can conveniently compare, select and purchase the best coverage from hundreds of plan options. This includes Base, Top-up, and Super Top-up health plans across all categories such as individual, family floater, senior citizen and critical illness.
Log on to our portal sana.insure to find customized health insurance plans and compare various plan options that suit your requirements. You can also get in touch with us over WhatsApp chat on 8278271818 or call us on 1800 202 8118 to connect with a Health Insurance Expert at SANA. Insure.
Wish you a healthy and happy life!