How much health coverage do I need?

Health coverage ensures your financial security as it pays for hospitalisation expenses when needed. Here are key reasons why health insurance is vital to everyone:

• Medical costs keep increasing – the rising costs of high quality healthcare make it expensive to handle without insurance. With the rising health inflation (currently medical inflation is 14% in India), getting insurance to cover medical bills is a good idea.

• Safety net for finances - good coverage will be a safety net while handling medical issues. It will prevent the large hospital expenses from draining your savings. With insurance, you can concentrate on healing instead of losing sleep over the cost factor.

• Availability of good care - health insurance ensures you get good medical care. Many policies cover preventive care that involves routine check-ups and lets you visit specialists when necessary. This increases your chances of early detection and better treatment.

Health insurance coverage is a highly personalized decision that you must take for yourself and your family. Here are some critical factors to consider:

1. age and health status

Young persons and couples often feel they don't require too much coverage and tend to buy as little coverage as possible. However, even the healthiest person may face a medical emergency that can occur at any age, so they must be prepared with at least some form of comprehensive coverage.

Any older adult or senior citizens with pre-existing conditions need higher coverage as age increases the health risks. For persons with chronic health conditions such as diabetes or heart disease, this ensures the medical costs are managed easily. 

2. family size

If you are single, your coverage needs will vastly differ from those with a family to care for. Families require maternity benefits, child health care, and spouse coverage, thus increasing coverage.

3. lifestyle and risk factors

If you work in jobs classified as high-risk cattegory, like construction or firefighting, you require more health insurance coverage because the likelihood of injury increases. You'd also need additional coverage if you are into adventurous activities like skydiving or skiing.

4. geographic location

Healthcare costs vary from one city to another. On an average, rural households spend 4,129 and urban households spend 5,290 for hospitalization in India. So, healthcare expenses vary based on where you get the treatment. Also, certain modern treatments may not be available in rural hospitals.

5. financial situation

Your premiums are directly impacted by the chosen coverage. While you may desire the most extensive health insurance policy, your budget must allow you to pay the required premium. Those with substantial emergency funds can choose basic coverage as they can meet out of pocket expenses comfortably. 

6. future plans

If you are planning for a significant medical event, such as a pregnancy or surgery, factor this into consideration for coverage. Such plans require higher limits to cover anticipated expenses. 

Your choice of health insurance sum insured directly impacts health insurance premiums. So, calculating the amount of health coverage needed can help you control insurance costs. The general rule of thumb says you should get comprehensive health insurance cover matching your annual income at around 35% to 50% with a minimum of ₹5 lakh to ₹10 lakh. 

Step 1: assess medical costs

Calculate current expenses such as hospital visits, treatments, and medication costs to understand what they would cost in the future. For those in the 18 to 30-year-old age bracket, a basic insurance policy would be enough to cover them in case of emergencies. As you age, you must expand your coverage because health risks also increase. If you are planning to buy a family plan, assess the medical costs of everyone covered by the policy. 

Step 2: determine your affordability 

Factor in your deductibles, co-pays, and coinsurance to understand your total financial responsibility. It is possible to control costs with a higher sum insured if you opt for higher upfront payments. You can double your protection when you upgrade from ₹5 lakh to ₹10 lakh, but premiums only increase by 30-40%. Also, the tax benefits available for health insurance plans reduce your financial burden further. Hence, medical insurance with higher coverage is far more affordable. 

Step 3: account for the worst-case scenario

Prepare for expensive events like operations or treatments over several years based on your medical history. Your coverage should handle these large medical expenses, especially as you age.

Step 4: factor in ongoing and preventive care

Ensure that coverage includes routine check-ups and preventive care, including vaccinations. This is important for families and patients with chronic conditions.

Step 5: cost of prescription medications

Medicine costs tend to rise with age, particularly if you are more than 50 years of age. Even when you are young, if your health condition requires you to take medicines for several months, their cost can add up quickly unless your insurance covers those expenses. 

Step 6: purchase riders to expand coverage

Riders like critical illness, personal accident, maternity, and hospital cash among others, are extra coverage options you get as an added protection. These riders cover risks that the base policy may not fully cover. Remember, your add-on riders can increase health insurance plan premiums. 

Any family member could be involved in a medical emergency at any moment, and the cost of one hospital bill could wipe out your savings. For this reason, it's important that you assess your family's health insurance needs carefully.

Experts recommend that when a person decides to take health cover for their family, they should look at the range of ₹5 lakh to ₹10 lakh as a bare minimum. A good strategy would be to delve into family floater plans wherein you can insure the whole family under a single health insurance plan. 

A family floater plan is an insurance scheme under which a fixed amount is available to all the family members, thereby covering everyone without the need to buy individual policies. This ensures that premiums are budget-friendly, yet the health insurance policy gives broad coverage to your loved ones. As the chances of all family members falling ill and exhausting the sum insured are less, it is a smart decision for the financial protection of your whole family.

While you can add your parents or in-laws to a family health insurance policy, it is better to purchase senior citizen insurance separately to offer adequate coverage for aging family members. Moreover, health insurance plans for seniors come with higher premiums; therefore, choosing the right balance between coverage and affordability is crucial.

Senior citizen health insurance policies must be at least ₹10 lakh as life-saving procedures cost more. Most insurance providers offer senior citizen plans that provide cashless hospitalisation, cover pre-existing diseases, and include day-care treatments. Understand the waiting period for such policies to maximise health insurance benefits.

Adequate health insurance will form the basis for securing your future, long-term financial protection and ensuring good quality care. You need to figure out your coverage based on age, health, and family size and target a minimum of ₹5 lakh to ₹10 lakh. A simple way to increase coverage without increasing costs is by purchasing riders. Optimal health insurance coverage offers you invaluable peace of mind, knowing that you and your family are protected.

Get started on your health coverage journey! Check out the comprehensive health insurance plans at hizuno and buy health insurance plan that fits your needs.

1. What is the ideal amount of health insurance?

The ideal amount of health insurance depends on factors like your location, family size, healthcare costs, and lifestyle. Generally, it’s recommended to have coverage that’s at least 50% of your annual income. This ensures that any unexpected medical expenses won't strain your finances. 

2. Do I need 1 crore health insurance?

A ₹1 crore health insurance policy might seem excessive, but with the rising costs of healthcare, it could be practical, especially in metro cities where critical treatments can be highly expensive. A large insurance provides extensive coverage for critical illnesses, surgeries, and long hospital stays. 

3. How much amount of health insurance should I take?

The minimum insurance amount you must aim for should be at least ₹ 5 lakh if you are an individual and ₹10 lakh for a family health insurance plan. Factor in rising healthcare costs, inflation, and potential family needs for comprehensive protection. 

4. What are riders, and should I consider adding them to my policy?

Riders are additional coverage options that enhance your base policy, such as critical illness or personal accident coverage. Adding riders can provide extra protection, but keep in mind they may increase your premium.

5. What are the tax benefits associated with health insurance in India?

Under section 80D of the income tax act, you can claim tax deductions for premiums paid towards health insurance for yourself, your spouse, children, and parents. This can help reduce your taxable income and overall financial burden.

ARN: Zuno/marketing/blog/how much health coverage do I need/12/24/01

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