Buying a health insurance policy is something that must be done thoughtfully. You should put a lot of effort, thought, research, and importance into this decision. It is not something that just happens on its own, and if it does, it is most likely to go wrong.
Starting from decisions like what kind of policy, offline or online medical policy, how many policies, which health policy, how much coverage for each policy, etc., are to be taken very seriously because they, in turn, determine your financial planning. (Without which nothing seems stable.) Buying maternity health insurance, senior citizen health insurance, or comprehensive health insurance is all up to you, but with great decision-making skills.
These decision-making skills are required the most while deciding how much your assured amount should be. The amount of money you will receive when the policy matures or you raise a claim. That is what we will discuss in this blog: how to calculate your health insurance.
Factors to Keep In Mind to Determine Sum Assured in Health Insurance
Various factors affect the calculation of your assured amount, like your financial plan, policy premium, and more. Let us discuss how these factors influence your decision on the amount.
Your Income and Financial Plan
As mentioned above, financial planning is the base of your life and spending habits. Not just the spending habits but the capability and willingness to pay for a certain something comes from your financial planning.
Your financial plan is born from your annual income. Your income decides the affordability. For example, if you cannot pay above a certain amount, you will have to lower your coverage and IDV.
Additional Investment and Insurance Policies
If you have a good annual income and can afford multiple policies and investments, you can do that. But if you have existing insurance policies and want to buy health insurance above that, ensure your buying capacity. You do not want to miss paying your health insurance premium because you have multiple other premiums to pay. So plan accordingly.
Family Medical History
Do you have any medical history? Do you have a hereditary illness passed on through generations? If yes, consider getting a policy specifically for that illness or a comprehensive policy that includes this illness. Consider all the treatment fees, medical fees, and rising inflation while deciding the amount of your health insurance.
This will ensure that you do not settle for a lesser amount than required. You must decide on enough amount because you shouldn’t take any chances with a hereditary disease. They can be expensive as well as unpredictable. So, be ready with the shield of your health insurance.
Type of Insurance Policy
What is the type of health insurance you are planning on buying? There are multiple types of health insurance like maternity, individual, family floater, senior citizen, comprehensive, etc., and different types of policies have different benefits and limitations.
Your policy premium, policy tenure, and policy benefits all change accordingly. If you have decided upon the type of policy, you can change your financial planning accordingly. Or, if you have decided upon the finances, you can adjust the policy accordingly.
Age of the Policyholder
Age is a determining factor in many things, but with health insurance, it is imperative. Human life is fragile and vulnerable, which makes their health a crucial subject. Age and health are also very closely connected to each other. If we don’t have a proper lifestyle, our health will be affected.
This directly translates to a higher risk of raising a claim. If the person is young and healthy, the IDV can be minimal or average. But if the person is nearing or above 50, the assured amount should be good enough!
Choice of Hospital Type
Why does the type of hospital matter? In a country like India, we have the most affordable as well as the most expensive medical care facilities. We have government hospitals that work well, but also an option of thousands of private hospitals.
If you want your or your policyholder’s potential treatment to be in a government hospital, you will not need a huge assured amount. But, if you want your treatment to be held in a private hospital, you must consider a hefty sum assured from your health insurance policy.
Before you buy health insurance online and decide on an IDV (Insured Declared Value), these are some of the things you should consider.
These factors determine the ideal amount. How much coverage you need, how much premium you can pay, what is the amount necessary to cover your hereditary illnesses, and more such questions answer your primary question.