Summary of this article
Medical inflation at 10–14 per cent makes periodic health insurance upgrades essential.
Old sum insured often proves inadequate in metros and Tier-1 cities.
Life changes like age, marriage, children increase healthcare cover needs.
Base cover plus super top-up offers cost-effective higher health protection.
Health insurance is vital for everyone, especially because the increase in health care costs due to increases in hospital costs, new technology, and a higher utilization of private clinics has caused medical inflation in India to be 10-14 per cent. However, health insurance is not something you can buy and forget.
Why You Need To Upgrade Your Health Insurance
Any health insurance should be reviewed yearly or at least every two to three years. “The amount of coverage that would have been good enough for a major hospitalization five years ago will likely not be adequate in metropolitan and Tier-1 cities,” says Sarita Joshi, head of health and life insurance, Probus.
Annually reviewing your policy provides an opportunity to evaluate whether your total coverage amount is adequate for current treatment costs. In addition, you can ensure that early signing of super top-up or policy add-ons can be done prior to reaching an advanced age or without paying significantly higher premium rates.
Age progresses, and with it, healthcare utilization and hence treatment costs grow. At 40 and beyond, people are more likely to require increased healthcare services; therefore, the number of services provided to them increases. “When people marry and have children, their need for coverage becomes much greater than when they are single or childless,” says Joshi.
When people move from rural areas to cities, they may be exposed to significantly higher hospital charges than if they had stayed in semi-urban or rural areas. “In addition, the high prevalence of lifestyle diseases such as diabetes, hypertension, heart disease, etc., in younger people means that families should also expect to pay higher long-term expenses for medical care,” says Joshi.
What Matters More When You Upgrade Your Insurance
“Each person has a unique reason for choosing an upgrade from their existing policy; therefore, no two people will make the same decision regarding whether to upgrade or not,” says Arun Ramamurthy, co-founder, Staywell.Health.
It is common for individuals seeking the greatest amount of protection from hospitalization to find that additional layers provide them with stronger protection than only one layer of coverage. In addition, if an individual is looking for the most cost-effective means of increasing their overall limits for higher-value claims, then a super top-up is a viable option for them. It is equally important to periodically review and remove any exclusions/sub-limits that may have become outdated since the issuance of the policy.
“Typically, the combination of a strong base and super tops and the removal of outdated exclusions/sub-limits from a policy provides the policyholder with a balanced, practical means of insuring themselves,” says Ramamurthy.
