What Is The Ideal Sum Insured For You?

Your health insurance may offer the superior benefits, but it won't be perfect until you choose a sufficient sum insured. Read these tips to choose a sum insured

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When you buy health insurance, you must choose the right sum insured. However, this is easier said than done! There is no step-by-step guide or quick formula to calculate the ideal sum insured of your plan. Instead, you should decide the optimum level of protection based on several factors. It might seem like a lot of work, but that’s where we come in! We have put together some points that will help you choose the perfect sum insured for your health insurance policy.

First, buy according to your age!

You should buy health insurance when you are young! Not only is it more affordable, but you might also require lesser cover. Several experts believe that a sum assured of Rs 2 to 3 lakh is sufficient for those in their early 20s. However, you may increase your sum insured over the period of time as per your need at the time of policy renewal.

Choose a sum insured vis-à-vis your income

Your annual income plays a pivotal role in deciding the sum insured of your policy. You need to purchase coverage based on your affordability. Some experts suggest you should buy a cover that doesn’t cost more than 2% of your annual income. Therefore, if you earn Rs 5 lakh per year, it is recommended that you buy a cover to the tune of approximately Rs 10,000.

Choose as cover according to your lifestyle!

You must choose a sum insured based on the lifestyle you live. If you deal with high levels of stress, have a job that does not allow you to exercise, and do not follow a healthy diet, you need higher levels of protection. This is especially so if you consume tobacco or alcohol. Also, never hide such habits from your health insurance provider when buying the policy as it will lead to complications when you need to make a claim.

Determine the kind of hospital you would prefer

There are different kinds of hospitals you can choose to get treated. Some are basic while others are quite extravagant, and then there are those that are in between as well. It goes without saying that the cost of treatment will also differ from hospital to hospital. Determine the kind of healthcare service you’d prefer and choose a sum insured accordingly.

Consider the medical history of your family

If your family has a history of medical issues, it is best to get a sum insured that will protect you from said illnesses. If any these illnesses fall under the ‘critical illness’ list, then you should get a separate cover as a basic plan will not suffice for the expenses that you might have to deal with.

Factor in the cost of inflation

The cost of medical care is going through the roof. Some recent reports put the rate of inflation on health products at around 10%. Therefore, procedures that cost ‘x’ today will cost ‘2x’ in just a few years! This is why it is important to keep inflation in mind when choosing the sum insured of your policy.

Remember that we’re all different and therefore our health insurance needs are also bound to differ. That’s why you need to choose a sum insured carefully and we hope these points will help with this. Good luck and take care, live long and prosperous!


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