What is Sum insured in Health Insurance?
Understanding the Sum Insured in Health insurance
Introduction
If you are one of those first-time policy buyers certain terms could be completely new to you. It’s important to understand the insurance jargon to make the right decisions. As a policy buyer, you should know what sum insured means and its overall impact on buying the right policy.
What is sum insured?
The maximum amount that the insurance company will agree to pay the policyholder in the case of a medical emergency or expenses incurred due to hospitalisation is known as the “Sum Insured”. Under health insurance, it refers to the maximum coverage. It is important to note that if the actual costs are greater than the SumInsured, the policyholder is responsible for paying the exceeded amount.
For instance, your top health insurance coverage has a 3 lakh sum insured, you got hospitalised twice during a specific year. Your hospital cost for the first time hospitalisation was 2 lakh rupees, and for the second time, it was 3 lakh rupees. Your total hospital bill was 5 lakhs, but the maximum amount covered by your health insurance is only 3 lakhs. In this case, your insurance provider will cover 3 lakhs of your hospital expenses, leaving 2 lakh for you to pay from your pocket.
How is sum insured determined?
Lifestyle habits:
Today’s lifestyle, such as sedentary living, unhealthy food habits, etc., has increased health risks. It is advisable to have a higher sum insured to ensure you have adequate protection in case of certain unexpected circumstances.
Age:
Early twenties and thirties could choose a bigger sum insured as they can more easily opt for a higher sum insured at reasonable prices. Because your medical bills might rise as you become older, this higher sum insured can be helpful later in life.
Health History:
Sum insured varies based on the person’s health condition. The sum insured may be higher for people with health issues like diabetes, heart diseases, blood pressure, etc. However, it is advisable to opt for a higher sum insured as it will provide necessary financial back-up in times of need.
Members covered:
Sum insured will vary based on the number of people covered under the policy.
Choosing the policy with adequate sum insured will secure you and your family from medical expenses.
Tips for determining the right sum insured
Researching and comparing quotes from different insurance providers give you the benefit of understanding and choosing the right policy that works for you.
It might be essential to choose a high sum insured in particular, if you are choosing a family health insurance plan that can cover the needs of an insured family members. It is advised to have a suitable sum insured on all policies, even for individual health insurance policies.
What does the sum insured in health insurance depend on?
· Age: The medical condition risk increases with age.
· Lifestyle: A few habits like smoking and drinking could affect your overall health, thus increasing your premium amount.
· Health history: If you or your family have a history of chronic diseases, you may require a higher sum insured.
· Number of dependents: If you have more dependents, then the higher your sum insured should be.
· Income: Your income decides how much sum insured you need.
· Plan type: Critical insurance plans may need a higher sum insured.
· Family-floater or group medical policies: These best policies cover more people, as they may need a higher sum insured.
Sum insured vs sum assured
Let’s discuss the major difference between the sum insured and the sum assured. The sum assured refers to the guaranteed amount paid out to beneficiaries as the result of an insured event. In contrast, the sum insured refers to the maximum amount your health insurance company will pay to cover your loss.
Conclusion
Understanding the relevance of certain essential insurance terms, such as the sum insured, and ensuring you choose an amount as per your family’s needs have become very important. Understanding that each member has unique requirements, Star health insurance offers various plans with wide sum insured options at affordable premiums.
HELP CENTRE
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FAQ
What is sum insured in health insurance in India?
<p>Sum insured is defined as the maximum amount that the policyholder can claim below a health insurance plan in a policy year.</p>
What is the sum insured in Health insurance example?
<p>Let’s see the sum insured example. Think you have a health insurance plan with a sum insured of Rs 10 lakhs. At the time of the policy year, you raised the first claim for Rs 7 lakhs. As the claim amount is less than Rs 10 lakh, the insurer will pay the whole claim amount.</p>
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