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December 1, 2023

Understanding sum insured in a health insurance policy

With its numerous benefits, a health insurance policy proves to be a very valuable asset when it comes to securing your savings. But you also have to be careful about being aware of the features of a health insurance policy. Do not worry, there are many who find difficulties in understanding the precise terms of such policies. In this article, we aim to help you get a better understanding of the term ‘sum insured’ in health insurance.

The sum insured in a health insurance policy is the amount that a policyholder can claim up to in case of a medical emergency. This amount is given by the insurance company to provide coverage for the expenses incurred by the policyholder. If these expenses are exceeding the amount of the sum insured, the remaining overheads have to be dealt with by the policyholder themselves.

Importance of opting for the right sum insured for your health insurance policy

Here’s why it is so important to choose a suitable sum insured:

  • Savings are intact
  • Sufficient cover to pay medical bills
  • Coverage for medical expenses of the entire family (family floater plans)

Being backed by health insurance is always a good decision. It is also very important to think about the sum insured that you require since medical expenses can add up to quite a huge amount. If you feel that you prefer a better coverage amount, then it makes sense to choose a higher sum insured while buying a health insurance policy.

How is a sum insured set?

To understand this in a better way, let us take a look at the following example:

A policyholder or someone from their family gets hospitalized twice, and their health insurance policy has a sum insured of 2 lakhs. The medical bill from the first hospitalization comes to 1 lakh, in which case the policyholder’s health insurance policy will cover it. For the second hospitalization, the medical bill adds up to 1 lakh 20 thousand. Since the sum insured provides coverage of up to 2 lakhs, the policyholder will have to pay the remaining Rs.20,000 from their own pocket. Do bear in mind that your health insurance policy may have certain exclusions not covered in the sum insured.

So, what kind of a sum insured should you go for?

As we all know, healthcare expenses are ever-increasing. Without decent insurance coverage, your savings could take quite a hit while clearing all the medical bills. This is why it is considered best to go for an insurance policy that has a sum insured value that is enough to secure your finances. Consider the costs of treatment at the hospital of your choice while deciding the sum insured. Also, consider the costs of medical treatment overall based on the city you live in while choosing your sum insured.

If a regular health insurance plan is not suitable, you should try going for a comprehensive health insurance plan. This is because a comprehensive plan offers you much more as compared to a regular health insurance plan, not only in terms of the sum insured, but also other benefits such as pre-and post-hospitalization charges, diseases covered, ambulance charges, the cost for diagnosis, and so on.

We hope that this article has been useful to you. All the best!

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