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Health Insurance - How much is enough?


Health Insurance is a MUST.

But how much cover is enough?

Read my interview in Money Mantra Magazine on this subject.

(1) How should an individual decide how much health insurance cover he/she needs (in both individual and family floater cases)?

Given the average cost of treatments nowadays, a floater cover of Rs.3-5 lakhs is the bare minimum for any family. While those in the higher age brackets and/or with adverse medical history should aim for Rs.5-10 lakhs cover.

(2) Is a health cover of Rs 5 lakh or Rs 10 lakh enough to take care an individual or a family in case of medical emergency?

While many medical problems can be treated within Rs.5-10 lakhs, critical illnesses may cost much more. Therefore, for young families with no adverse family medical history, a cover of Rs.5-10 lakhs may be sufficient. However, given the increasing incidence of even serious problems such as heart disease, stroke, cancer etc., higher the cover, the better it is.

And those in the higher risk category should, subject to affordability, try for a higher cover.

(3) Is it advisable to go for high health cover (say Rs 30-50 lakh) considering the medical cost in future that is expected to rise?

While high medical cover is surely desirable, one cannot ignore the cost aspect. Therefore, each one has to strike a balance between cost and cover based on one’s paying capacity.

However, high-cover medical policy is not the only solution. One could work out an appropriate combination of conventional mediclaim policy, top-up insurance and critical illness rider to get higher cover at lower overall premium.

Such insurance covers, however, must be supported by building a separate corpus for health needs (alongwith the retirement corpus) as health insurance in old age is not only difficult to obtain but the premiums also reach prohibitively high levels.

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