Health Insurance: The Age to Buy and The Cover Amount You Will Need

The common belief that medical insurance is meant for older people or the person ailing with a critical disease is the primary reason for underinsurance in India. This belief is strengthened by the increase in such disease cases and the exorbitant hospital bills. However, the claims data reveals just the opposite. The data shows that people at a young age are more prone to illnesses or diseases and thus require a health insurance plan. Also, the ever-rising medical costs and the list of diseases that account for the major claims will help you decide the size of the insurance and the illnesses you need to get cover for.

Buy basic health plans

Buying a basic health plan is mandated by industry data. The ICICI Lombard claim figures of 2018-19 clearly show that 45% of total claims made in the year are for genitourinary, digestive and infectious diseases. For Royal Sundaram, fever and infectious diseases accounted for 30% of total claims. Bajaj Allianz had the maximum number of claims for gastroenteritis, dengue and fever of unknown origin, and cataract.

Thus, the data clearly shows that not only critical illnesses can take a toll on your savings but non-critical diseases such as infections, injuries, etc. can also prove to be a burden on your financial stability. Thus, the need for basic health cover is indispensable.

Insure at a younger age

In India, many people do not feel the need for a medical cover, whereas others depend on their employer-provided insurance. Going by the data, 43% of total claims are accounted in the age bracket of 19-35 years, and that too for poisoning and injuries and 42% are for infection. Accidents are another cause of claims in young people. Nikhil Apte, Chief Product Officer - Health Insurance, Royal Sundaram, states that customers under 25 years of age comprise 30% of accidental claims.

Genitourinary infections are also common among the people between 26-45 years of age. Unlike older people who mostly stay at home, young people are exposed to public facilities and are more vulnerable to getting infections.

Buying insurance at an early age also ensures coverage for pre-existing diseases after a specified waiting period, when the need arises.

Consider future costs

Most insurers predict that rising air pollution and sedentary lifestyle is going to prove a hike in the pulmonary-related and ortho-related ailments. Even in future with technological advancement and better chances of cure, the treatment for cancer, cardiac-related diseases, and organ transplant are expected to rise. Thus, the need for a comprehensive health cover.

The optimum cover

The rising treatment cost, new ailments and long-term care expenses do necessitate an optimum medical cover. However, insurance penetration in India is relatively low. According to Head, Accident & Health Claims, SBI General Insurance, Sukesh Bhave the people generally consider health insurance as a tax-saving instrument rather than a risk cover option. However, now, the mindset of the millennials are changing, and they are considering the risk coverage factor also.

Despite increasing awareness, the average sum insured options across insurers ranges between Rs. 3.5 to Rs. 5 Lakh. It is determined that for an average family of five members, a basic cover of Rs. 5 Lakh is optimum to start with and then reviewing it over a period of time depending on the income and the premium affordability is necessary. A critical illness policy offers a lump sum benefit which can be beneficial in rehabilitation and long-term recovery and lifestyle modifications, but along with it, a full-fledged health cover is a must have for everyone.