Choosing the right sum insured is one of the most crucial decisions when selecting a health insurance policy. With rising medical expenses, hospitalisation costs, and unexpected emergencies, having adequate coverage is not a luxury but a necessity.
Whether you’re looking to buy health insurance online or through an agent, understanding what the sum insured means—and how much is enough—can save you from financial hardship in times of need.
In this article, we’ll explore why the sum insured matters in medical insurance, how to determine the ideal coverage for you and your family, and how tools like a health insurance premium calculator can simplify decision-making.
Why Does the Sum Insured Matter in Health Insurance?
The sum insured is the maximum amount your insurer will pay for hospitalisation, treatment, or related medical expenses during the policy period. If your hospital bill exceeds the sum insured, you’ll have to pay the excess out of pocket. This is why choosing the right sum insured is essential when exploring health insurance plans in India.
Let’s take an example: if you’ve opted for a policy with a ₹3 lakh sum insured but incur ₹5 lakh in hospital bills due to surgery, you’ll end up paying ₹2 lakh yourself. Hence, underinsuring can be just as risky as not having medical insurance at all.
What Factors Should You Consider Before Choosing a Sum Insured?
So, what is the ideal sum insured regarding medical insurance? It depends on several factors:
- Type of Policy: Are you buying an individual plan, a couple’s plan, or a family floater policy? A family health insurance covering four members will require more insurance than an individual policy.
- Number of Family Members: More members mean greater risk exposure and potential hospitalisation expenses, warranting higher coverage.
- Age and Health Condition: Younger individuals may initially be fine with moderate coverage. However, if you’re older or have chronic illnesses, you’ll need more.
- Pre-existing Diseases and Medical History: If you or a family member has diabetes, hypertension, or any chronic ailment, choose higher coverage for peace of mind.
- Genetic or Hereditary Health Risks: A family history of heart disease or cancer? It’s better to err on the side of caution.
- Location and Lifestyle: If you live in a metro city like Mumbai or Delhi, medical treatments will likely cost more than in smaller towns.
- Existing Insurance Cover: Do you already have employer-provided health insurance? Evaluate if it’s sufficient. Often, employer policies have limitations and may not cover family members or major surgeries.
How Much Health Insurance Cover Do You Really Need?
There is no one-size-fits-all answer. But here’s a simple guideline:
- Individual Health Insurance: At least ₹5–7 lakhs
- Family Floater Policy: Minimum ₹10–15 lakhs (higher if you have elderly members)
- Senior Citizens: ₹10 lakhs or more, ideally with critical illness add-ons
Always aim to be slightly overinsured, especially in light of inflation and medical advancements.
How to Estimate Your Ideal Health Insurance Coverage?
With so many health insurance options, selecting the right sum insured can be overwhelming. Thankfully, insurers offer tools like health insurance premium calculators, making the process much easier.
A health insurance calculator is an online tool that helps you:
- Estimate the premium for a specific sum insured
- Compare different medical health insurance policies
- Understand how your age, city, and coverage amount impact premiums
- Select additional riders (like maternity, OPD, or critical illness cover)
You can also use these calculators to adjust your deductible and co-payment terms to reduce your premium if needed.
Digit Insurance, for example, provides a transparent calculator to help you estimate the right sum insured. Their latest report shows that 97% of health claim decisions were made within the same day, backed by app-based tracking and real-time updates for policyholders.
How to Balance Your Health Insurance Coverage and Premium Affordability?
Finding the perfect health insurance plan is about balancing affordability with adequate protection. A higher sum insured gives you peace of mind but comes with a higher premium. So, how do you find the sweet spot?
Here are a few tips:
1. Start with the Minimum Recommended Amount
Even if you’re on a tight budget, avoid going below ₹5 lakhs for individual policies and ₹10–15 lakhs for family floaters. Most private hospitals consider this the basic threshold to handle medium-level hospitalisations.
2. Choose Top-Up Plans
If you’re concerned about premium costs, opt for a lower base plan and add a top-up or super top-up plan. This strategy allows you to increase coverage without a huge spike in premiums.
3. Review and Upgrade Yearly
As medical costs rise, so should your health insurance coverage. Review your policy annually using a health insurance premium calculator and adjust as needed.
4. Consider Riders and Benefits
Rather than going for the highest sum insured blindly, consider policies that include annual health check-ups, day-care procedures, maternity benefits, and wellness rewards. These often enhance your coverage without raising premiums drastically.
Selecting the right sum insured is not just about choosing a number—it’s about preparing for life’s medical uncertainties. Whether you are a single professional, a parent, or a senior citizen, the ideal sum insured should offer peace of mind without straining your wallet.
Use a health insurance premium calculator to explore different scenarios and premiums. Leverage top-up options, evaluate family needs, and prioritise quality over cost.
After all, your medical insurance policy should be a safety net, not a financial burden.
