How Important Is High Sum Insured For Health Insurance: The Policybazaar Show

Medical inflation is a reality and the cost of health care is also increasing. Consumers have realized the importance of health insurance after Covid-19 and the demand is increasing. When choosing the sum insured of a health insurance plan, we need to keep in mind the average cost of hospitalization, not just today but what is it going to be after 20-30 years from now. 

“The person who is buying health insurance today will probably need it more once he gets old. If he is inflicted with a chronic illness like diabetes or hypertension, then it would be difficult for that person to increase his health insurance cover,” said Ashutosh Shrotriya, Head, Products and Business Process, Religare Health Insurance. 

It is always a safe bet to have more than adequate health cover so that it won’t just pay for your claims today but also take care as you grow older. Minor diseases like dengue have seen astronomical hospital bills. Sometimes, in extreme cases, the cost of Covid-19 treatment as well as the average length of stay has a high amount. As long as the customer has taken the adequate sum insured and quantum of cover, there isn’t any problem. 

Recently, there has been a good development in the insurance industry that new products have entered which give a very significant quantum of cover, even up to Rs 1 crore and they are not expensive. 

“These health insurance covers may be only 30% more expensive than what a Rs 10 lacs health insurance cover would cost. That should be a very good option for the customer as it will be good enough for today as well as tomorrow,” said Shrotriya.  

The cost of Religare’s Care Advantage Rs 1 crore health insurance cover for a 30-year-old health individual would be around Rs 13,000. It isn’t very expensive compared to Rs 10 lacs cover which costs around Rs 8000 per year.
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In the next 20-30 years, claims of Rs 40-50 lacs are not something which is improbable. Having a Rs 1 crore cover should take care of such scenarios. 

FEATURES OF HIGH SUM INSURED COVERS 

These new products which offer Rs 1 crore cover are focussed towards bringing a proposition in the market where it is easy for customers to take a decision to upgrade from Rs 5 or 10 lacs to Rs 1 crore health insurance cover. 

One of the good features of these products is no claim bonus. The sum insured keeps increasing by 10% every year in case of no claim and goes up to Rs 1.5 crores. In some way, that is an added protection against medical inflation. 

They also have innovative benefits like an automatic recharge. In case of a single high-value claim, if the entire sum insured is exhausted, still, the family can avail health insurance through subsequent claims through this benefit which loads additional Rs 1 crore cover during the policy year. 

Another great feature is annual health checkups through which policyholders can monitor their health appropriately. In addition to these, there are products in the market which give global coverage. For example, Religare’s Care Global health insurance plan offers Rs 6 crores sum insured and gives global coverage wherein the customer can go abroad and get treated at their own choice. 

[ Also read | Health Care Costs For Covid-19 And The Right Insurance Cover: The Policybazaar Show]

PORTING POLICY TO A HIGH SUM INSURED COVER 

Regulations permit customers to port from one policy to another. They can approach the new insurer and ask for a transfer of benefits of old product to the new product. The waiting period already served in the old insurance policy is waived off in the new insurance policy. The waiting period is the time period before getting covered for a specific ailment or pre-existing disease. 

It makes it easier for a customer who has a Rs 5 or 10 lacs cover to upgrade to new policies of a high sum insured. Instead of buying a super top-up, customers can upgrade to a new policy and also retain the benefits of the old policy. 

No claim bonus is also transferred during the portability of health insurance. So, if a customer has a Rs 5 lacs sum insured health insurance plan with a no claim bonus of Rs 5 lacs, he gets portability benefit of Rs 10 lacs in the new policy with an additional Rs 90 lacs cover in case they opt for Rs 1 crore health insurance. 

BENEFITS OF BUYING A HIGH SUM INSURED COVER AT AN EARLY AGE 

Premiums are relatively much lower if you buy health insurance at an early age. At the same time, the likelihood of getting a high sum insured cover is less if the customer is already inflicted with a chronic illness like hypertension, diabetes, etc. It is always a good choice to take a health insurance cover when you are young so that if any ailment occurs in the future, you don’t need to hunt for a health insurance cover or try to increase the sum insured. 

[ Also read | The Digital Journey Of The Health Insurance Sector: The Policybazaar Show]

UPTAKE OF HIGH SUM INSURED COVERS 

According to Shrotriya, a large number of customers are opting for a higher sum insured than before. “Five years back, the number of customers who would opt for Rs 10 lacs or a higher cover was somewhere less than 10%. Until recently, this number has gone as high as 33-35%. We foresee that this number would grow even higher, upwards of 50% where people will opt for high sum insured covers,” he added. 

He believes that as people are trying to adapt to living in the Covid-19 world, they will definitely go for a high sum insured cover in the future.  

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