Health Insurance: Why going for a high-sum insurance medical policy may not be a bad option?

In August 2023, insurance coverage dealer agency PolicyBazaar got here up with a report displaying that the price of frequent illnesses that require hospitalisation has greater than doubled within the final 5 years. The identical report additionally says that medical health insurance claims for infectious ailments and respiratory issues have been rising at a charge of 14 per cent yearly, which is twice as a lot as retail inflation.

That was an estimate for frequent ailments within the post-pandemic period.

For crucial ailments, the rise in therapy prices can pinch a affected person extra severely.

For people or a household with a primary medical health insurance plan, the sum insurance coverage (SI) may be insufficient to cowl the bills of therapy.

It may possibly pressure them to fall again on their private financial savings to foot medical payments, thus rising their monetary burden significantly.

For a middle-income individual, such undesirable medical prices can put their monetary targets on maintain.

In one other situation, if an individual has a household historical past the place recurring well being points are frequent, a primary well being cowl of Rs 10 lakh can also fall in need of protecting medical bills.

In such a backdrop, the need of high-SI medical insurance coverage involves the fore.

Since many of the firms promote their high-SI medical cowl plans as tremendous top-up plans as add-ons with their primary plans, one would not must pay a lot extra cash for having a well being cowl of Rs 25 lakh or Rs 1 crore.

E.g., if a 30-year-old individual residing in Delhi goes for Star Well being’s Good Well being Professional Plan, the annual premium together with GST for SI of Rs 5 lakh is Rs 5,983. For a Rs 10 lakh SI, it’s Rs 7,374.

But when one goes for a Rs 25 lakh or Rs 1 crore plan, they must spend Rs 11,043 and Rs 15,515, respectively.

The premium for a Rs 1 crore cowl will not be even thrice the premium of a Rs 5 lakh SI plan.

Siddharth Singhal, Enterprise Head, Well being Insurance coverage, Policybazaar, says, “If you happen to purchase a medical health insurance coverage with a sum assured of Rs 5 lakh, it could not be sufficient to cowl most severe illnesses similar to most cancers, continual kidney ailments, and heart-related well being circumstances. More and more extra prospects are choosing Rs 1 crore medical health insurance plans, that are often a mix of base plus tremendous top-up plans from the identical insurer. It comes at solely 10–15% additional value, offers 1 cr protection at inexpensive charges and claims may be cashless.”

One other necessary issue {that a} high-SI plan will help you with is thrashing rising medical inflation.

Adarsh Agarwal, Chief Distribution Officer, Digit Common Insurance coverage, says a medical therapy costing Rs 2 lakh right this moment will value Rs 7.41 lakh 10 years down the road.

“People ought to have in mind the longer term worth of medical procedures and hospitalisation earlier than shopping for a medical health insurance cowl. The medical inflation charge in India is pegged at round 14%, which is among the many highest in Asia. This basically signifies that a medical process that prices Rs 2 lakh at the moment will value Rs 7.41 lakh 10 years from now.”

For a wholesome individual of their 30s, a primary medical health insurance plan may match, however having a high-SI cowl plan prematurely helps them full the ready interval for crucial sicknesses at fairly an early age.

Together with that, should you go with out a declare for a 12 months, your medical health insurance firm can also reward you by supplying you with a reduction on the premium.

Agarwal says, “One ought to get a medical health insurance cowl as early in life as potential because the premium charges are the most affordable for kids, they usually can end any stipulated ready durations for pre-existing ailments, particular sicknesses, and so forth. when they’re in good well being.”

The advantage of taking a high-SI coverage early in life can are available in outdated age, when one’s medical bills could multiply many occasions.

Bhaskar Nerurkar, Head, Well being Administration Group, Bajaj Allianz Common Insurance coverage, says, “As people age, their healthcare wants have a tendency to extend, making a better sum insured prudent, particularly for senior residents. An extra profit is that high-coverage insurance coverage additionally offers you with a wider selection of hospitals, medical doctors, and healthcare services. For the reason that prognosis of crucial sicknesses similar to most cancers, kidney- or heart-related ailments, and medicines can be costly, a high-SI plan can even assist cowl such bills.”

There was a time when medical insurance coverage firms did not cowl many of the crucial sicknesses, however now a few of them are protecting as many as 99 crucial ailments of their high-SI plans.

Shashi Kant Dahuja, Chief Underwriting Officer, Shriram Common Insurance coverage, says, “Excessive protection ensures you can deal with important medical bills with out depleting your financial savings. It covers a variety of medical companies, together with hospitalisation, surgical procedures, diagnostic checks, and medicines. Excessive protection insurance policies usually embody safety in opposition to crucial sicknesses, offering substantial monetary help throughout such difficult occasions.”

On the whole, insurance coverage sums as excessive as Rs 1 crore are unused.

However in sure circumstances the place a number of hospitalisations are required for an individual with a crucial illness or when one has to go for high-cost robotic or bariatric surgical procedures, such plans could come useful.

Shashank Chaphekar, Chief Distribution Officer, ManipalCigna Well being Insurance coverage, says, “A medical health insurance coverage with larger sum insured can deal with every thing – from therapy of crucial sicknesses similar to most cancers and heart-related illnesses to superior procedures similar to robotic and bariatric surgical procedures.”

The opposite advantage of a high-SI coverage floater plan is that many members of the family may be coated below a plan, and everybody of them could have sufficient insurance coverage cowl to satisfy their medical wants.

Nerurkar says, “Within the case of a floater cowl, the restricted sum insured is accessible for all of the members of the family and if there may be a couple of medical episode throughout the 12 months, the quilt chosen is probably not sufficient. Therefore, a better sum insured below the floater plan is all the time advisable.” 

Earlier than shopping for a medical insurance coverage coverage, one ought to think about components similar to age, household medical historical past, sort of pre-existing ailments, having a high-SI coverage by giving an additional premium could save from undesirable medical bills which will value your funds dearly.