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Deciding How Much Health Cover You Need

24 Jun, 2017

In the last few decades, there has been a significant improvement in the life expectancy due to the advancements in medical sciences. But while the life expectancy has increased, the changing lifestyle and several external factors have made people live a longer but less healthy life. Add the medical inflation which is expected to increase by 15% every year to it and the need for a health insurance is now higher than ever.

Irrespective of the age, it is now very important to have a good health insurance in place to protect yourself from unexpected high medical expenses. One of the most important things when selecting a health insurance is the coverage you opt for.

As per the data from IIBI (Insurance Information Bureau of India), less than 1/5th of the people in India have a health insurance. On average, the people who have an insurance are only covered for up to Rs. 2 lacs. With the high medical costs of today and the expected double-digit inflation, it is not difficult to see that people who have a health insurance are highly under-covered.

If you are about to purchase a health insurance, use the below-mentioned factors to select the right coverage amount-

1. Premium you can afford

The premium you pay is directly proportional to the coverage amount. It is generally recommended that the premium should be at least 2% of your annual income. For instance, if you earn Rs. 6 lacs per year, you should pay a premium of Rs. 12,000 which as per the current medical costs will provide you a decent coverage.

Also, if you are currently unable to pay 2% of your income, go for a lower premium and lower coverage and it will still be better than not having an insurance policy. Remember that you can easily increase the premium and coverage when you start earning more.

2. Age

The next important factor is your age. You should buy a health insurance as early as possible and then try to increase it by 10%-12% every year so that you will have an excellent coverage when you are in your 40s and 50s when the chances of suffering from health problems are much higher.

If you are above 40 and already suffering from a disease, the insurance provider will generally not cover the existing problem for some years which will defeat the actual purpose of buying the health insurance. So, make sure that you buy a health insurance as early in your life as possible and consider your age and health condition when selecting the coverage.

3. Family history

If there is a history of lifestyle diseases in your family, there will be a major possibility of the disease passing through generations and you might suffer from the same in future. If you do belong to this high-risk category, you should buy a health insurance with as wide coverage as possible when you are young and healthy.

4. Hospital

The type of hospital that you generally prefer is also an important consideration as there can be a significant difference in the cost of medical facilities offered by two different hospitals. If you generally prefer a hospital which can be considered expensive, it is better to go for a higher coverage.

Every individual is different and so is their coverage requirement. Thus, it is very important to consider the factors mentioned above or get in touch with a reliable insurance provider to select the right coverage for your health insurance. 

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