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How Much Health Insurance Should You Get?

The amount of health insurance cover required by an individual is dependent on a number of factors, as well as the type of health insurance plan which they seek to purchase.

India TV Business Desk Edited by: India TV Business Desk New Delhi Updated on: March 20, 2018 14:09 IST
How Much Health Insurance Should You Get?
How Much Health Insurance Should You Get?

The importance of having a health insurance policy is something which most people realize when they fall sick and have to seek treatment. Medical care costs have risen at a rapid rate over the past few years, a rise which has affected everyone, but mostly those belonging to the lower income groups. However, when the question arises about the amount of health insurance cover that one must have, there is no clear consensus. The amount of health insurance cover required by an individual is dependent on a number of factors, as well as the type of health insurance plan which they seek to purchase. Read on to find out how the things you must take into account before deciding your health insurance cover amount.


Premium Payment Capacity

Before you get a life insurance policy, don’t you make a note of your finances and budget to decide just how much you can set aside towards your life insurance premiums? For most people, that answer will be yes. The same logic also applies when one purchases a health insurance policy as well. A policyholder’s premium payment capacity is one of the most important factors which can help one decide the amount of coverage they can afford, or not. When buying health insurance, one must first take stock of their finances and figure out the amount they can afford to pay towards a medical insurance plan. Only after that must they decide on the type of plan, depending on their budget. In health insurance, the premiums are directly proportional to the sum assured. Hence, if someone has opted for a cover of Rs.20 lakh, their premiums are going to be high. After adding applicable taxes, the amount might increase even further. It is good to know that you can always enhance your health insurance coverage later on.

Your Yearly Income

When speaking of health insurance policies, a policyholder’s annual income has much influence on the amount of coverage which they can get. When you approach an insurer to purchase a health insurance policy, one of the things that you will be asked to provide is your income proof. This is an important part of the application process to help the insurer determine the maximum amount of health insurance cover that you are eligible for.  Ideally, it is suggested that one get health insurance cover which is 50% to 100% of their annual income. Along with that, you must also take into account 100% of medical expenses that you may have incurred in the past 3 years, to arrive at an approximate figure.

Family’s medical history

Speaking of your health, your family’s medical history can have a great impact on your own health. For instance, if anyone in your immediate family such as either of your parents, or grandparents have suffered from any disease or condition such as diabetes, or a particular type of cancer, your chances of contracting the same will be much higher, as compared to someone who has no such family history. This is something which insurers keep an eye out for when evaluating your health insurance application. Someone who has a family history of a serious illness and is more likely to be at risk of contracting the same illness at some point in their lives will automatically be a high-risk applicant who will need greater cover. Such individuals, who fall in the high-risk category, are also ideal candidates for getting a comprehensive health plan.

Applicant’s age

Another important factor which influences your health insurance coverage amount is your age. The thing with age is that the younger you are in life, the healthier you are likely to be. This automatically brings down your health insurance coverage requirements. For example, someone who has purchased a health insurance policy at 25 years of age can easily make do with a coverage amount ranging between Rs,5 to Rs.10 lakh, and can enhance the same by a percentage they see fit.  When you buy a health insurance plan at a younger age, you are more likely to get it at a lower premium, just like life insurance, given the benefit of good health and perhaps, absence of any pre-existing disease or serious illness. If the same health insurance policy is bought by a 40+ year old individual, they are more likely to be charged a higher premium than a 25 year old would be asked to pay.

Grade of hospital

When it comes to medical care, there are various grade of hospitals which people can choose to get treated at. Usually, high-end, luxury hospitals which fall on the upper end of the grade spectrum will charge you significantly more for a treatment or hospitalization. If the same treatment is taken at a lower grade hospital, it is likely to cost a fraction of the price charged by a luxury hospital. And this, too, is an important factor for consideration while deciding the amount of medical insurance coverage. Before you decide on your cover amount, try to decide on the grade of hospital you are comfortable getting treated in, so you have some idea about how much you are likely to spend on medical care, if and when you need it.

When it comes to health insurance, there is no right or wrong amount that you can get as cover. The whole idea is to evaluate your situation, financial and medical, so you can decide just how much is sufficient to cover your needs.   

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