Aiming primarily at high net worth individuals (HNIs), general insurance companies recently began offering large-sized family floater health insurance policies (more than Rs 1 crore). However, insurers are now offering these expensive insurance policies to people with middle-class incomes.
Purchasing such an expensive health insurance policy becomes costly for many people. Is buying a family floater health insurance policy for at least Rs 1 crore worthwhile?
Do You Need Health Insurance Worth Rs. 1 Crore?
According to many financial planners, one crore of health insurance is excessive health insurance coverage. One must be realistic about how much cover is needed and take only that much. Remember that the premium for such a high level of health insurance will be very high. Therefore, you should only purchase the amount of insurance that will cover most risks at a fair price. It is important to be realistic and develop the ability to tolerate some risk.
The family health insurance plan’s coverage amount should be sufficient based on factors such as where you live (this influences the cost of medical care to some extent), potential medical costs associated with hospitalisation, and other factors. The ‘right’ cover is whatever makes you feel secure and comfortable, subject to a base price of around Rs 10-15 lakh for a typical family of 3–4 people. Those who reside in large cities with high healthcare costs may choose a 25–30% higher number.*
When purchasing high-deductible health insurance, understand the math.
Once you pass the Rs 15-20 lakh sum insured threshold, the cost of family floater health insurance begins to taper off significantly in terms of incremental cost per additional rupee of the sum insured.*
Reasons To Choose A Higher Level Of Health Insurance
Today, diseases once thought to be incurable are treatable thanks to advancements in medical technology. However, treatment costs are also going through the roof due to medical inflation. Because of this, you need adequate health insurance coverage to come up with the large sums of money necessary for proper care. Medical inflation increased by more than 50% in 2018–19, from 4.39% in 2017–18 to 7.14%.
In addition, one should be aware that a family floater health insurance policy covers the entire family rather than just one person, with benefits paid out under the same insured amount.
Because your family shares the sum insured by your family floater health insurance policy, You can choose a higher health insurance coverage. Therefore, higher health insurance coverage with an adequate sum insured would always be sufficient in the event of multiple claims in the same year.
One should, however, only choose a higher family floater health insurance policy after determining their needs. Consult a financial advisor before purchasing such a pricey health insurance policy.
*Standard T&C Apply.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.