Should You Buy a INR 1 Crore Health Insurance Plan?

Raghav and Anshi have been married for three years and have always maintained an opulent style of living. But last year when Raghav was diagnosed with lung cancer, all hell broke loose. Though both of them had medical insurance, they didn't have enough coverage. The treatment cost was above INR 25 lakhs. Raghav had to quit his job and Anshi started to depend more and more on her family and friends for the most basic of requirements. 

The story isn't of Raghav and Anshi is not a rare one, there are so many examples where people do not have the required cover and thus, end up in life-shattering results. Health insurance is indeed the first step to safeguard against any financial crisis, but how much is enough? 

“Ek crore ka insurance” sounds very attractive and practical, but is it really? Choosing the best health insurance plan can be an overwhelming task. For most of us, it is difficult to weigh the pros and cons of investing in a health plan that comes with a high sum insured. Before we discuss the various points to keep in mind when contemplating to buy a INR 1 crore insurance, let us take a look at the approximate cost of treatment of some critical diseases:

Understand the Mathematics

It may seem that a INR 1 crore cover is more than enough, a bit in excess, but if you calculate the actual price that you pay for a INR 1 crore cover will generally be about 25%-30%. However, it must also be kept in mind that when it comes to preparing for the future, there isn’t any set formula for an “optimal’ cover. But when thinking about health insurance, err on the higher side.

Why Go for Such a High Cover?

The first reason is of course maximum coverage. A plan with such high cover comes with a high premium too, but remember when you are paying an extra premium you also have the benefit of availing almost ten times as the cover. Other than this, take note of the following:

• Cover for Family 
  With a medical plan of INR 1 crore, you are ensuring that you and your family will be financially protected in case of a medical emergency.
• Expensive Treatments
  The critical illnesses are called so not only because of the fatal nature of the illness but also because not everyone can afford the treatment. With a cover of INR 1 crore, you have at least one less thing to worry about.
• Overseas Treatment
  There are many health insurance plans that allow you to avail of the coverage even when you are out of India.

To help you decide If you really need a INR 1 crore health insurance policy, ask yourself the following questions: 

• Are you above 40 years of age?
• Do you have any serious illnesses running in your family?
• Are you the main earning member of your family?
• Do you work in a risky workplace?
• Does your work cause you too much stress?

If you answered in Yes for more than two questions, then it is probably correct to invest in such a plan.

Is Buying an INR 1 Crore Health Insurance Plan Very Expensive?

An INR 1 crore health insurance plan would generally be adequate for a family of 4, consisting of husband, wife and 2 children. Take a look at the premium paid for family floater health insurance plans with a sum insured of INR 1 crore, with husband and wife aged 35 and two children between 2-6 years of age.

The table above gives a fair idea of the premium that is paid annually for a sum insured of INR 1 crore. However, the premium for the same plan can be different for different people as the rate of premium depends on various factors such as age, occupation, pre-existing illnesses, number of family members, location and gender. It is a general assumption that the income of a person grows along with his age, but that cannot be the only criteria for buying a high-cover health plan as the premium for the plan also increases with age. The rising medical inflation must also be kept in mind when finalising the sum insured. 

Should You Buy an INR 1 Crore Health Insurance Plan?

Healthcare expenses are on an all-time high. An average cover of INR 10 lakhs may prove rather inadequate in the time of need. When you invest in the high-cover health insurance policy you not only save your family from financial risk but will also be able to get the best treatment available for them. To take care of the inflation you can add a top-up or a super top-up cover to your plan. Even if you have already bought a medical policy you can always opt for a super top-up over and above your plan. Most companies offer the following benefits with INR 1 crore as the sum insured:

• The plan takes under its cover room charges, ICU charges, OT charges, doctor’s fee.
• Pre and post hospitalisation expenses, for a specified number of days, are covered.
• The premium paid is exempted under section 80D of the Income Tax Act.
• Some companies also cover the newborn baby’s vaccination.
• Around 20 major terminal illnesses are covered.
• Most of such plans come with a lifetime renewability

Sedentary routine, unhealthy eating habits, irregular sleeping patterns have brought a steady rise in multiple lifestyle diseases. And when it comes to terminal diseases we may often find ourselves helpless in fighting it, but that doesn't mean we can’t prepare for a situation like that. Rather than saving a few thousands now and repenting later, it is better to invest in a plan that offers maximum coverage. Having a health insurance policy that comes with a high sum insured can act as a shield between you and a financial meltdown.