How Much Health Insurance Cover Do You Need?
- Keeping in mind your Income – You cannot lay your hand on any and every health insurance policy that comes your way. Before you answer how much health insurance cover you need you need to answer how much actually you can spare from your earnings to pay the premiums. Obviously higher the risks cover higher the premiums. I may feel that I need Rs 20 Lac of health insurance cover but here one has to understand whether they have the means to do so. You cannot put in all your savings in health insurance programs as you have other responsibilities to take care of.
- Calculate the percentage of your income that may suffice as health insurance cover – Let us begin this with an example – I may feel that I earn Rs 5 Lakhs and I should have health insurance cover of Rs 5 Lakhs. And someone else with an income of Rs 10 Lakh may find Rs 10 Lakh cover as a decent figure but we need to frame an upper limit for the same. Someone might be earning Rs 60 Lakhs but do you think having Rs 60 Lakhs as health insurance cover would be a wise move? Depending upon one’s income, the cover may vary – for someone it may be 100 percent of their income while for others, 50 percent or less of the income may serve as sufficient cover. Again, this as well depends upon how much you can invest but be sensible enough not to get over-insured.
- Expenses – Your past expenses on health care may also form a basis of answering how much health insurance you need. For example, if someone has spent Rs 3 Lakhs in past 4 years on health care, he would aim at having a higher insurance cover for himself and his family. Someone who has not spent even a penny on health care in past 4 years would be reluctant in opting for a high cover healthcare plan. Thus, your past expenses on health care may also have an impact on your decision of buying your health cover.
- Rising Healthcare Costs – We can, in no way, ignore the rising healthcare costs. With healthcare costs rising big time, your calculation on how much you may require if any unforeseen illness strikes you or your family, would surely affect your health cover. In this case averaging the bills of hospitalization and medication may be of help. For this exercise you may pen down top ten reasons for which people are hospitalized and the expenses incurred by them on the treatment. Averaging the bills may help you in setting your health insurance cover.
- Your Call – Ultimately, you are the master of your life and well being. After analyzing your position and paying capacity, only you can decide for yourself as to how much health insurance cover you need. No one can step in your shoes and decide for you. This has to be your call.