How to Derive the Optimal Health Insurance Coverage Using a Calculator?

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How to Derive the Optimal Health Insurance Coverage Using a Calculator?

The last few years have witnessed the onset of many unheard diseases including COVID-19, Zika Virus, Monkeypox, Black Fungus and the list goes on. The urgency of having health insurance thus increases with the rising number of hospitalisation cases.

But wait, the surge in the cost of healthcare treatments is also grabbing attention recently. When medical inflation touches to 14%, it is quite imperative to opt for the right health insurance coverage for all.

Inflation has made all to re-evaluate their investments even from minor to larger one. Having said that a regular health cover of Rs. 5 lakh might prove as insufficient for a family of 4 members. Hence, this is the high time one should go for optimal health insurance.

But how much coverage is optimal coverage? How much health insurance do you need? Is there really a way to calculate how much your health insurance sum insured should be?

If you are interested in getting answers for these questions, you are in the right place. At the end of this article, you’ll be getting enough information about optimal health insurance and the usage of online calculator.

Let’s start then-

Sum Insured: The Most Crucial Thing in Health Insurance

Choosing the right sum insured is probably one of the most important things you need to decide while buying a health insurance plan. It is essential that your health insurance offers sufficient coverage- neither too less, nor too high coverage.

A few factors play an important role in deciding the right health insurance sum insured. Here you go:

  • The number of people you wish to cover in the plan is probably the most important factor you need to consider. If you are single and do not plan to start a family in the near future, you may find a sum insured of ₹5 lakh sufficient. However, if you want cover your spouse, your children, and or your parents, you would certainly require a much higher sum insured.
  • If you are in your 20s, your required coverage might be comparatively much less than someone who is nearing 50.
  • When you have a family history of illnesses, it is highly recommended that you opt for higher coverage.
  • Someone who smokes and/ or drinks on a regular basis might want to invest in a health insurance policy with a higher sum insured.
  • The BMI (Body Mass Index) of an applicant, is a key player as it determines at how much risk the individual is. Often a higher BMI can lead to a higher premium. 
  • The type of insurance coverage you need always depends on your insurance requirements. However, individual plans are more expensive as compared to family floater policies.
  • What is important here to remember is that when you buy health insurance, you are planning for the future , and thus, it is essential to factor in inflation. The surgery that costs ₹20,000 today might cost nothing less than ₹50,000 in a few years' time.
  • Last but not the least, another important factor to be considered is your budget. While it is tempting to opt for coverage that is all-inclusive, keep in mind that it would be directly proportional to the premium that is to be paid. Choose a premium that you can pay.

Tip: In 2019, the IRDAI introduced the option of EMI (Equated Monthly Installments) to pay for your health insurance. Choose a preferred installment that fits your budget.

  • Add-on covers are a great way to enhance the coverage offered by your base plan.

>> Also Read: How to Make Health Insurance Premium Payment Online

Getting Optimal Health Insurance: The Role of a Calculator

Now that we have established that choosing the sum insured is crucial, let us focus on how to derive the optimal health insurance coverage. Insurance experts suggest a thumb rule that states that health insurance coverage should be at least half of your annual income. For instance, if your yearly income is ₹20 lakhs, then your coverage should be a minimum of ₹10 lakhs.

However, with the rise in the number of lifestyle diseases and the rising medical inflation, this thumb rule may fall a little short. That’s where a health insurance calculator can come in. This free online tool is a great way to calculate the required coverage easily and conveniently. Let’s take an example of how Care health insurance calculator can be used:

  • Go to the Care Health Insurance homepage, and click on ‘Calculate Health Insurance Premium’.
  • Enter the required contact details. Click the drop-down box and select the kind of insurance you want to opt for.
  • On the next page, you’ll have to select the number of people you wish to cover under the policy.
  • Then you’ll be prompted to select the age of every family member.
  • On the next page, you’ll be asked to enter the PIN code of your city.
  • You will now be able to see the total premium. On the health insurance calculator, you can increase or decrease the sum insured to fit the premium into your budget. You also have the option of choosing a term of 1, 2, or 3 years. 
  • In case you wish to include any add-ons to your plan, now is the time to do so. You now need to click on ‘Buy Now’.
  • Fill in the required details on the next page. An insurance expert will get in touch with you soon to help you with the remaining formalities.

To Conclude

If you are looking for Optimum Health Insurance Plans to cover yourself and/ or your loved ones, then make sure you chalk out your healthcare needs and analyse the details of the health plans that you wish to choose.

With the health insurance calculator, you can pick the optimal health insurance as per your needs. This free online tool is a dynamic tool that you can use as many times as you want while making alterations in the variables to reach a suitable decision.

Disclaimers: The above information is for reference purposes only: Policy Assurance and Claims at the underwriter's discretion.

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