Health insurance can help you be financially prepared for the adversities. But do you know how much cover is enough?
Many people purchase a cheap health insurance plan thinking the sum insured will automatically double in the next five years. However, given the current medical inflation rate, all the best financial planners advise getting a minimum health cover between INR 5 to 10 lakh.
The exact amount you need depends on a lot of factors. Here is a quick checklist to help you evaluate how much health insurance cover would be adequate for your individual needs:
Family History: Check your family history for any inherited diseases before choosing an insurance plan. If you are susceptible to one or more health problems, then you fall into the high-risk category and should get a comprehensive health cover accordingly.
- Place of Residence: Medical expenses differ from place to place. For instance, if you live in a metro city, your medical expenses are likely to be higher than someone living in a smaller city. Moreover, it puts you at a higher risk of developing lifestyle diseases. Your health insurance plan needs to cover the added aspects.
- Age: The earlier you get an insurance plan the better. You can avail a good discount of premium in your 20s or early 30s. The premium rate increases with age. Besides, if you are above 45, your application is likely to be rejected or sold at an inflated premium since the health risks involved are higher.
- Number of Dependents: Your insurance plan should also cover those dependent on you (wife/kids). In such cases, you can opt for comprehensive family health care coverage that allows you the convenience to save pocket expense.
- Lifestyle: If you have a sedentary work style, poor eating habits, and body weight issues, or suffer from a lifestyle disorder like hypertension, then you are at a higher risk of developing major health issues later in life. Take all of this into account before settling on a particular plan.
- Hospital Preference: All hospitals fall under different grades, which directly affects the charges to be incurred for the same treatment. So, your health insurance coverage must be calculated as per the probable expenses, depending upon the average grade of the network hospitals in your vicinity.
- Annual Income: Your health insurance cover is directly proportional to your yearly income. You must be able to pay the premium in order to avail the benefits. So, consider all the factors mentioned above and then choose the best affordable plan. You can increase the extent of cover and benefits later as your income increases in the future.
- Tax Benefits: You can also get a health insurance plan solely for the purpose of tax benefits. Section 80D allows exemption up to INR 25,000 per financial year for your health insurance payments, and up to INR 30,000 if you are 60 years of age or above. In case a senior citizen is dependent on you for care, then you can also avail an additional exemption of up to INR 30,000.
Keep these points in mind while choosing your insurance plan and get the emergency care you deserve without worrying about the frightening question, ‘How am I going to pay the bill?’
To learn more about health insurance plans, contact our advisor at 5nance.com today!