Health insurance is no longer a luxury purchase. It is very much essential since medical bills have gone up significantly for even the smallest procedures. To avoid paying a hefty sum when there's a medical emergency, it's best to buy health insurance cover. But how much should be the cover? Is ₹5 lakh health insurance sufficient to cover all your needs? You will find out in this article.
What is a ₹5 lakh medical insurance?
A health insurance of ₹5 lakh means the total amount covered by the insurance company in any financial year is limited to ₹5 lakh. If your medical bills go beyond that amount in a specific year, you have to pay the extra amount out of your pockets.
Suppose, you have ₹5 lakh family health insurance from January 2023 to December 2025. Your total medical expenses in 2024 are ₹6.2 lakh. The insurance company will only pay the ₹5 lakh cover promised to you. The remaining ₹1.2 lakh you have to manage on your own.
Is ₹5 lakh medical insurance premium sufficient?
There are different scenarios in life according to which the sufficiency of ₹5 lakh health insurance premium changes. Here they are:
- Normal circumstances
In normal circumstances, people do not spend over 5 lakh on medical expenses in a year. If you are completely healthy and do not face any accidents, your medical expenses will be way below the set limit. In that case, a ₹5 lakh medical insurance premium is more than sufficient.
- Underlying medical conditions
If you have an underlying medical condition that surfaces after you buy health insurance, your medical expenses will be higher. The total estimate depends on what kind of medical condition we are talking about. If it's something like diabetes which is easily manageable with meds, the expenses can be covered under ₹5 lakh. But if it is something extensive such as cancer, you will need a higher insurance cover.
- Old age
Senior citizens have significantly more medical costs than a 25-year-old. Due to old age, they develop a number of health conditions. They also require more regular check-ups. Diagnostic procedures are also more to check for underlying conditions. A medical insurance of ₹5 lakh might not be sufficient to cover all these costs. That's why it is recommended to buy a health insurance cover of more than ₹5 lakh for senior citizens.
₹5 lakh health insurance for family
If you have registered your family members on your health insurance plan, they also get the benefits from your coverage. They might not receive the 100% cover amount, but they will receive a partial cover. The exact percentage varies from one insurance provider to another.
Suppose, you have registered your wife and two children on your family health insurance, then you will be the primary recipient. Which means you will get more coverage than the rest of your family. Most private sector companies in India offer a similar health insurance plan to their employees.
In the case of ₹5 lakh health insurance for family, the total medical expenses of all your family members in a particular year should be less than ₹5 lakh. Individual family members do not get ₹5 lakh each. The amount should be a sum of the expenses of all your family members.
For a family of 4, this amount might not be sufficient. You should opt for a higher coverage. But if it's just you and your wife, it could be manageable under ordinary circumstances. But if one of your family members has a pre-existing health condition, it's better to opt for a higher coverage medical insurance.
₹5 lakh health insurance premium
There's a common misconception that ₹5 lakh health insurance means you have to pay a total sum of ₹5 lakh to the insurance company over the years. That's not it. You have to pay a premium which is a very small amount every year. And as long as you continue to pay your premium, you will be eligible for the ₹5 lakh cover every year.
The premium amount varies for each insurance provider. Ideally, a ₹5 lakh health insurance premium should be somewhere between ₹5,000 to ₹10,000 a year. This is a very small amount considering the coverage you are getting. As an individual, getting the maximum of your medical expenses covered under this plan is worth the money.
₹5 lakh health insurance is the most basic insurance plan you could opt for. It has fewer benefits as compared to premium plans. But it covers all the necessary expenses such as outpatient procedures, diagnostic tests, overnight hospitalisation, essential surgical procedures, and more. It might not cover daycare facilities. Still, it covers a significant portion of your medical expenses.
As a healthy and young individual, this is sufficient to fulfil all your needs. But as you age, you should consider getting a better health insurance plan.
