Is it necessary to get a higher cover policy at the moment? Find out

The rising costs of healthcare and the uncontrollable costs of extended hospitalization today have made it absolutely necessary for enhancing the value of their insurance cover.

Besides the ongoing COVID-19 pandemic, lifestyle led disease is on the rise. Experts say this highlights the importance of having reasonable health insurance coverage for the family. Additionally, there is a steep rise in healthcare expenses.

According to industry data, health insurance claims are seeing inflation of over 10 per cent per annum. Without proper health insurance coverage, any kind of hospitalization, as a result of COVID-19 infection or for any other reason will sure to leave a hole in your pocket.

Shanai Ghosh, CEO and ED, Edelweiss General Insurance says, “The average hospitalization cost in case of Covid is at least twice of the average cost otherwise. The incremental premium that one might have to pay will be far more affordable than the incremental medical expense that might hit you. The current pandemic has definitely taught us that having the right coverage does make for added protection and peace of mind.”

Is it necessary to get a higher cover policy at the moment?

Currently, the cost of COVID-19 led hospitalization cost is seeing a huge hike with hospital bills running into lakhs of rupees. Roopam Asthana, CEO and Whole-time Director, Liberty General Insurance says, “It should be noted that renal failure, cancer and cardiovascular disease remain major reasons for emergency and medical care and hospitalization for these costs much more than for COVID-19 led hospitalization. It is advisable to switch to the higher sum insured policies at the earliest possible.” Hence, the rising costs of healthcare and the uncontrollable costs of extended hospitalization today have made it absolutely necessary for enhancing the value of their insurance cover.

Subramanyam Brahmajosyula, Head – Reinsurance and Product Development, SBI General Insurance says, “Hospitalisation due to covid and related complications is covered under any health insurance. If you are staying in tier 2 or 3 locations, health insurance cover for Rs 5 to Rs 7 lakhs may be adequate in most cases for individual or couple. However, in the case of metro, it is advisable to have health cover of Rs 10 lakhs to Rs 15 lakhs considering the cost of medical treatment is higher.”

Additionally, also review the adequacy of sum insured on a periodic basis to take care of medical inflation as well as factors like increasing age (especially if you are covering senior citizens like parents, in-laws etc) and family size.

What type of insurers needs to switch to adequate or higher cover policies?

To start with first evaluate your current insurance policy to check for exclusions. Assess the health and risk status of yourself and your family before opting for any health insurance plan. Brahmajosyula, of SBI General, says, “If you are a first-time buyer at a relatively young age (below 30) and purchasing a policy for self only, a standard insurance policy like Arogya Sanjeevani which was introduced last year by all insurance companies may be sufficient. However, if you are looking at a more comprehensive cover for self and family including parents you should be looking at upgrading your coverage by way of cost-effective options like family floater cover and top up policies.”

Experts say one should switch to higher cover policies if their policy does not cover expenses adequately. Rakesh Jain, ED and CEO, Reliance General Insurance explains, “What that means is – under hospitalization, there are multiple subcategories of expenses. Are these all covered? Also, in some cases, the current policy does not cover a wide range of diseases. The objective of a higher cover is to ensure better coverage.”

For instance, a family of 4 (Assuming Male 33, Female 31, 1st Child-3 years and 2nd Child-1 year) one can opt for a base health insurance policy with a sum insured of Rs 1 crore at a premium payment of around Rs 55,000 to Rs 65,000. However, if the same family opts for a base policy of Rs 10 lakhs and a super top-up policy with a deductible of Rs 10 lakh and Rs 1 crore sum insured, the combined premium for Rs 1 crore coverage of the same family could be around Rs 22,000 to Rs 25,000. With this option, one can save more than 50 per cent of the premium cost for the same sum insured. Hence, experts say, one should select a combination from an insurer that best suits the policyholder’s needs, whether it is going for a 1 crore policy directly or going for a combination package.