Does your policy actually protect you in times of need?

A medical emergency can happen any time, without warning. Does your health insurance actually reduce the intensity of the blow? Or does it fail to protect you when you need it the most?

You can be rightly insured, over insured, or underinsured. The right insurance coverage depends on your age, health condition, and lifestyle. When you're rightly insured, your cover pays for all your medical expenses. When you're over insured, your insurance cover is more than what you need. Such a policy will be expensive. But there’s nothing worse than being underinsured.

What does being underinsured mean?

Having health insurance coverage is the need of the hour. But, for many people, the process of buying insurance ends when they pay the premium.

Underinsurance is when your policy doesn't offer you enough coverage to manage medical emergencies. Most people realise this at the time of making a claim. In such scenarios, being underinsured is much like being uninsured.

This is what underinsurance looks like

You have a health insurance cover enough to cover any major illnesses. But, as time passes and inflation kicks in, your insurance cover loses its value. When the need arises, you find your insurance cover lacking. to give you an idea, below are some of the most common ailments & their treatment costs.

How do I avoid being underinsured?

Here are some steps to avoid being underinsured:

Do your homework

To avoid any nasty surprises down the road, do proper research before buying a policy. Go through the exclusions and inclusions carefully, and make sure that you understand the fine print.

Assess your needs carefully

Remember that a few years down the line, your health won't be the same. Also, there's inflation to consider. So, factor all these parameters in while making an insurance decision.

Select the right insurance amount

When choosing a plan, select the insurance amount wisely as it'll cover your medical expenses for a year. Consider your age; the younger you are, the lower the sum insured you need. You should also take a look at your income levels to analyse how much premium you can afford.

Premium payment capacity

When it comes to health insurance, it’s best to pay what you can afford. As a rule of thumb, set aside 2% of your annual income for insurance premium. So, if you earn Rs. 5 lakh in a year, spend Rs. 10,000 towards policy premium.

Percentage of annual income

When choosing a policy, make sure the sum insured lies between 50% and 100% of your annual income.

Family medical history

Insurance providers also look at your and your family's past medical encounters when deciding your insurance cover. Members falling under the high-risk category may require a comprehensive health cover, which comes at higher premiums.

Type of hospital

No two hospitals are made equal. Choose the best hospital according to your cover and needs when buying a policy.

Age

When it comes to health insurance, the lower your age, the lower your premium. For instance, if you're 25 years of age, you'd have to pay just 6,000 a year for a Rs. 10 lakh cover. A person aged 45 years would need to pay Rs. 20,000 to get the same cover.

Tax benefit

If you’re purchasing insurance primarily for the tax benefits, you don’t need a comprehensive plan. Remember that the maximum tax deduction limit is Rs. 25,000. For senior citizens, it’s Rs. 30,000.

How much health insurance do you need?

How much health insurance do you need?

Does your policy actually protect you in times of need?

What does being underinsured mean?

This is what underinsurance looks like

Chemotheraphy (per cycle)

Breast Cancer Surgery

Prostrate Cancer Surgery

Deep Brain Stimulation (for Parkinson's)

Breast Cancer Surgery

Angioplasty (one stent)

Bypass Surgery (CABG-coronary artery bypass graft)

Congenital Heart Defects (ASD/VSD Closure)

Valve Replacement AVR/MVR (including valves)

Valve Replacement AVR/MVR (minimal invasive procedure)

Heart Transplant

Liver Transplant

Kidney Transplant

Lung Transplant

Think you don't need health insurance? Think Again!

2015

2023

Expensive Surgeries & Procedures

Expensive Medicines for Cancer