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A sum insured that appears sufficient today may be inadequate to cover your healthcare expenses in the next few years. So, one should always factor in inflation before deciding on the sum insured.

“On account of rising medical inflation estimated at 15% per annum, the cost of healthcare has been rising steadily since last one decade or so. With rising healthcare costs, not having a health plan irrespective of an individual’s age – can be risky," said Pallavi Roy, Executive Vice President (Product Development), IFFCO Tokio General Insurance. “One can never be sure when an illness will strike, leaving you with huge medical bills. If not prepared, a single instance of hospitalization can very well disturb a family’s well-calculated budget," she said.

Sum insured should also depend on one’s residential city, history of family illnesses etc. "For instance, for people living in Class A cities, the cover amount should be at least ₹10 lakh given the high cost of living in metro cities. The premium also will vary accordingly," said Roy.

Young consumers, scouting for a health insurance cover, should always go for an optimum health cover. This will not only help them get the much-needed coverage to deal with the expenses due to illness, but also reduce the burden of premium cost on their overall monthly expenses.

At an early age, there are low chances of falling ill and lodging a claim, which means it is very likely that he/she will be able to enjoy the no-claim bonus or cumulative bonuses, which means their sum insured can rise year on year by up to 150%.

One should take an informed decision while deciding on the sum insured, as this will take care of costs if there is a medical contingency, and analyze the premium which is affordable. While riders and add-on will increase the cost, going in for a co-pay will reduce the premium costs substantially.

“For senior citizens and parents, one as to be practical while deciding on the level of coverage. Today, even a small routine surgical procedure can easily cost up to ₹1 lakh. A bypass surgery at a reputed hospital cost in excess of ₹2 lakh and will certainly cost more in the next five years," said Roy. Also, parents, if they are senior citizens, will definitely need a higher sum insured and the premium too would be high as per their age.

What policyholders should do

Over the years, healthcare industry has witnessed major advancements and innovation, however, there still exists diseases that are difficult to diagnose and require specialized care that can often derail one’s finances.

Parag Ved, Executive Vice President & Head – Consumer Lines, Tata AIG General Insurance said, “A health insurance the policy ensures adequate financial protection and covers the hospitalization expenses along with the cost of annual health check-ups, vaccinations, consumables, treatment of critical diseases and other expenses that can impact an individual’s financial planning. To avoid stress in case of medical emergencies and give sufficient coverage for family members, it is advised to opt for a comprehensive health insurance plan with a higher sum insured."

Pankaj Arora, MD and CEO, Raheja QBE General Insurance said, "Generally one should have a reasonable level of sum insured as cover in Health insurance depending upon the city person lives in, age etc. however, treatments like major organ transplant, onco surgery etc. are such treatments that cost huge amount of money where hospitalization is required for multiple times and prolonged duration. For such situations one should increase the cover through a combination of base cover and super top up health insurance cover for added financial protection available at affordable cost."