With the COVID-19 pandemic, and other contagious diseases that have surfaced in the past few decades, there are genuine concerns that despite your constant efforts to stay fit and healthy, your chances of falling prey to such contagions is a distinct possibility.
And then, a sudden encounter with hospitalisation is not an unforeseen medical adversity anymore. Over the years, with the rising incidence of accidents, communicable diseases and lifestyle related ailments that require acute or chronic medical attention, there would be hardly anyone of us who would have not experienced at least a single case of hospitalisation within immediate family members.
False Perception of the People
It is often observed that for most health insurance policy seekers in India, Rs 5 -Rs 7 lakh sum insured seems significantly large and enough to take care of all medical expenses. To them, the amount is sufficient to sustain their individual as well as family’s needs and requirements in case something untoward happens which leads to sudden hospitalisation.
No doubt, the figure of Rs 5-7 lakh sum insured may seem sufficient to an average middle class family in India as they only consider the current day situations and often forget to contemplate the future.
Taking the example of ongoing corona crises, as per available data, the average insurance claim filed for the treatment of coronavirus infection comes around Rs 5-7 lakh per individual which can go up to Rs 12-14 lakh in case of senior citizens.
Also, in case of multiple claims as the chances are quite high in case of COVID-19 because if one person of the file gets infected with COVID-19 the chances are quite high that the other members may also get infected.
During such a scenario, if one files for multiple claims, the sum insured may fall short to provide adequate coverage to each and every individual covered in the policy.
Unfortunately, there are some major critical illnesses as well that might put you under financial pressure.
Kidney Ailment; the cost of dialysis in India can cost anywhere between Rs 2,000 – Rs 3,000 per session in a metro city and for two sessions a week, the amount can easily reach around Rs 25,000 per month.
Cancer; in all, there are more than 100 types of cancer and the exorbitant cancer treatment cost often goes beyond Rs 20 lakh including surgery and chemo sessions.
Rising Cost and Impact
While the scope of healthcare and medical treatment is improving by leaps and bounds in the country - delivering more positive outcomes - the flipside has been a massive increase in the cost of medical treatment, and to be more precise – quality medical treatment.
As per a recent report on medical inflation rate in India published by Mercer Marsh Benefits - the medical trend rate in India i.e. the per-person cost increase due to medical inflation is most likely to rise at double the medical inflation rate in our country.
To put it simple, the medical trend rate is likely to be around 10-12 percent as the current inflation rate hovers somewhere around 5-6 percent. Many studies have even shown that out-of-pocket health expenses in India drive thousands of people below the poverty line every year.
Moreover, it’s not just the poor who face the consequences, even those with moderate savings and investments face a major setback to achieving other life goals when impacted by large unexpected medical expenses.
(Also read: Here's how coronavirus crisis has transformed the insurance industry) The Solution: Health Insurance with Adequate Sum Insured
Fortunately, health insurance is available to take care of various unforeseen health emergencies. Policies usually cover not only the cost of hospitalisation and the procedures and medical care during that period but even related medical expenses, such as diagnostic tests and medication, incurred before and after the event of hospitalisation.
However, just buying any health insurance will not solve the purpose. When buying a health insurance plan, it is very importantly to be adequately insured with enough sum insured.
As per insurance market trends, the number of people investing in plans with higher sum insured i.e. Rs 1 crore has significantly gone up. As of all the health insurance policies being sold online in the last 2 months, 30 percent are the ones with Rs 1 crore sum insured.
(Also read: Why it is the right time to buy an insurance)
A major reason for the significant surge in the number of people investing in such plans is the highly affordable prices at which it is being offered. For policyholders opting for a family floater plan, having a higher sum insured cover becomes all the more important as your family shares the sum insured of your health plan and in case of multiple claims in the same year, a lower sum insured would fall short.
You can buy Rs 1 crore health insurance policy which comes as a combination of the base plan and super top-up policy. Under this plan, the insurer pays for the hospitalisation expenses up to the total sum insured i.e. Rs 1 crore.
Having an in-built option in health insurance means the plan is not just a basic health plan, it is a combination of a base health plan and super top-up plan to have a total sum insured of Rs 1 crore.
A customer doesn't have to opt super top-up plan additionally to increase the sum insured. Such plans offer a higher sum insured at a reasonable rate, because it has an additional feature of a super top-up plan along with a base health plan.
Currently, there are two prominent insurers i.e. Max Bupa Health Insurance and Aditya Birla Capital that are offering 1 crore sum insured health plans with the combination of a base plan and a super top-up plan.
Max Bupa health insurance’s 1 crore health plan is a combination of Rs 5 lakh plus Rs 95 lakh- Health Recharge while Aditya Birla Capital’s Rs 1 crore sum insured plan is also a combination of Rs 5 lakh plus Rs 95 lakh.
For a 32-year-old individual living in a metro city, the Aditya Birla plan can be bought for Rs 9,552 while the Max Bupa’s Rs 1 crore plan can be bought for Rs 10,992.
Amit Chhabra is Health Business Head at Policybazaar.com