Most people I speak to have medical insurance.
But almost every one of them is covered for a small amount — and it’s nowhere close to how much cover they should have.
The 3 Factors That Matter While Deciding the Cover Amount
The Major Medical Events
You want your medical insurance to cover serious illnesses and accidents. Medical bills can run up to ₹25-50 lakhs for a major hospitalization/treatment. That's as true for a 25-year-old as it is for a 60-year-old. You will have to pay out of pocket or borrow if you do not have a large cover.
Medical Cost Inflation
Medical inflation in India was 14% in 2021. Generally, 2021 was an outlier in terms of costs. But medical inflation in India has hovered between 8-10% for the past 10 years.
At that rate, the value of money halves every 7 years. So, a ₹20 lakh cover may seem sufficient right now but would be worth ₹10 lakhs in 7 years and ₹5 lakhs in 14 years.
Your medical insurance cover should be able to tackle inflation.
Future-Proofing Yourself
You never want to be in a situation where you need a medical insurance policy but can’t get it. The most common reason for being denied new insurance is the prior existence of a major medical condition. Also, getting good new insurance after the age of 65 is difficult.
As a rule of thumb, it’s always a good idea to get as large a cover as possible while you’re still healthy and under 65. Also, check the insurance cover that your parents have. Bump it up, if needed.
P.S.- The policy is issued based on your health at the time you get a policy for the first time. Your existing medical insurance will continue as long as you keep renewing it — it does not stop on the diagnosis of a serious medical condition or when you cross the age of 65.
What’s the Right Medical Cover Amount?
My mother had once told me this many years ago: 'Investing is like exercising—do as much as you can but even a little is better than nothing.'
That's also true for medical insurance covers. Get as much as you can right now. Your end goal should be to get a cover of 75 lakhs to 1 crore.
For that, you can look at a super useful tool called a 'Super Top-Up'. It’s one of the most well-guarded secrets of the insurance world. You can use it to get a very high cover of ₹50+ lakhs at a low cost.
How low? Here's a real-life example
A few weeks back, I renewed a ‘Super Top-Up’ policy that covers me and my mom for ₹75 lakhs. I paid less than ₹10,000/year for it. I will write about Super Top-Ups in the coming weeks.
Hi, I am 40 year old (Female) and on the verge of buying a medical insurance. Can you suggest if there is a any particular medical insurance which gives cancer care cover and what should be the cover and premium I should look at. Thanks in advance!
please share more information about super top up. my mother is above 73 years old and has a basic health insurance policy. I want her to be well covered. How can I do that?