Summary of this article
Medical inflation at 14 per cent outpaces overall inflation near six per cent
Life events like marriage or children require higher health cover
Top-up and super top-up plans help raise cover at lower cost
Coverage may rise from Rs 5–10 lakh in 20s to Rs 20 lakh+ after 40s
Health insurance is important, but within a medical inflation of 14 per cent, which is much higher than the normal inflation, which is around six per cent, the health insurance cover needs to go up over time.
Why Your Health Insurance Coverage Needs To Go Up
At certain important points in our lives, such as marriage, having children, or starting a new job, people should regularly look at their health insurance coverage and determine if they need more. “Additionally, the rise in medical costs due to increased inflation, treatment costs in urban centers, and the rising number of lifestyle-related illnesses provides very strong reasons to believe that an adequate amount of health insurance could now be less than it once was,” says Arun Ramamurthy, co-founder, Staywell.Health.
It's not uncommon to think that when you first buy your health insurance at 22 years old, you have all the coverage you will ever need, but you will realise that as your responsibilities increase and the costs of healthcare grow, the decision to increase your insurance amount becomes critical to avoiding substantial out-of-pocket costs from unexpected medical emergencies.
How To Keep Premiums Reasonable
The form of increased health insurance coverage that is most affordable for an individual often depends on that individual’s current policy, what he/she can afford financially, and what is available in the marketplace. “An individual who increases the amount of his/her base policy will have more extensive coverage at the point of first dollar paid for hospitalisation, but this will cost them more in premiums over the long term,” says Ramamurthy.
As a result, many individuals will look at offering additional insurance through top-up or super top-up policies, which allow them to have much greater total insurance protection at a lower cost. Due to having the ability to apply the deductible throughout the course of the entire year, Super Top-Up policies are often preferred by individuals who anticipate having more than one hospitalisation throughout the year.
Step Up Your Health Insurance Cover With Age
As the cost of healthcare continues to rise, individuals need to reevaluate what constitutes adequate health insurance coverage.
“An individual in their 20s typically begins with health insurance coverage of approximately Rs 5-10 lakh, especially if they also have an employer’s group health plan. Individuals in their 30s should consider increasing their health insurance coverage to approximately Rs 10-20 lakh due to taking on more financial responsibilities and increasing family size,” says Ramamurthy.
Individuals in their 40s and beyond will want to increase their health insurance coverage to over Rs 20 lakh due to the increased cost of healthcare and the increased likelihood of requiring medical care.
