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Business News/ Money / Personal Finance/  Health insurance: How much coverage should you opt for and at what age?

Health insurance: How much coverage should you opt for and at what age?

Buying health insurance early in life is always the best solution. However, if you are a bit late, look at the coverage amount offered apart from other factors to ensure having the health insurance plan in place.

Buy health insurance depending on which age group you fall in.Premium
Buy health insurance depending on which age group you fall in.

It is no surprise that buying a health insurance plan is a necessity in today’s times, more so as the Covid-19 pandemic made many people realize the futility of avoiding health plans to escape the burden of paying premiums. No doubt, health insurance premiums eat into your earnings but the brunt of paying heavy medical bills, including hospitalization and subsequent treatment, can cause a dent in your savings.

More than the problem of ignoring health insurance is the tendency to be underinsured in the initial years of one’s life. This is because youngsters underestimate the significance of being adequately insured against possible sudden and unforeseen medical crisis situations.

While buying health insurance is imperative, how much health insurance you must have at which age must also be considered. There is no thumb rule to assess the correlation between age and insurance needs. A lot depends on factors other than age like income, proclivity to illness, the possibility of heredity disorders, existing health conditions, lifestyle habits, and more.

Buying insurance in your early 20s

You are young, energetic, and less likely to fall ill. Moreover, you can pay more since you are working and earning enough sans fewer familial responsibilities. However, one must forget how health insurance premiums are much lower when bought at a young age than when old. Due to the absence of old-age illnesses and associated risks, younger people pay lower premiums for insurance. Also, they have the ability to afford higher insurance coverage at lesser premium charges.

Viral Bhatt, Founder, Money Mantra says, “The ideal health insurance coverage amount for someone between 20 and 30 years old in India would also depend on several factors, such as their overall health, lifestyle, and financial situation. However, as a general guideline, it is recommended to have a coverage amount that is sufficient to cover the cost of unexpected medical emergencies or illnesses, without putting a significant financial burden on the individual or their family."

Bhatt added, “In India, a common benchmark for health insurance coverage is the IRDAI's (Insurance Regulatory and Development Authority of India) minimum coverage requirement, which is Rs. 5 lakhs (or Rs. 500,000) for an individual health insurance policy. However, it is important to note that medical expenses in India can be quite high, especially for certain treatments or procedures, and having a higher coverage amount can provide greater financial protection."

“It is recommended to consider purchasing a health insurance policy with a coverage amount of at least Rs 10 lakhs (or Rs 1,000,000) or more. Additionally, it may be beneficial to consider purchasing a policy with features such as cashless hospitalization, coverage for pre-existing conditions, and coverage for critical illnesses," he said.

Insurance for the 30 to 40-year-old

Some of you may be married by the time you turn 30 years old. This points to added responsibility that you cannot possibly ignore. This is an age wherein you must bear growing responsibilities both on the professional and personal front. The income is higher and so is the number of dependents. It is now time to assess your financial and physical health and buy insurance if necessary.

Dev Ashish, a SEBI-Registered Investment Advisor and Founder (Stable Investor) shares, “Many in their 30-40s and two to three dependents rely solely on their employer’s health insurance of just a few lakhs. But given the rising cost of hospitalization expenses, this level of coverage isn’t enough at all. And while the inadequacy of a Rs 3-4 lakhs cover is obvious, the practicality of having Rs 1 crore coverage is also debatable. There is no one right answer about how much health insurance one should have. But I would also say that it’s better to be overinsured than underinsured. But considering someone in 30-40 age bracket with a spouse and two children, having a cover of at least Rs 15-25 lakhs is advisable as a primary goal. Post that, one can further enhance it using super top-up plans as well."

Insurance for those aged between 40 and 60

The cost of buying insurance is always more as one ages. This is why buying health insurance late in life costs more. Since age-related risks are higher, it is always advisable to buy health insurance beforehand and have a budget to meet possible sudden health concerns. It becomes a far more expensive proposition when folks are in their 60s, especially, when they must be looking for moderately risky retirement plans instead of scratching their heads looking for the right health insurance policy.

Tanya Marwah, Head – Brand Marketing, Go Digit General Insurance says, “For individuals in their 40s residing in metropolitan cities, who have not taken any health insurance, it is advisable to get a minimum health insurance coverage of Rs 10 lakhs. If they have dependents, such as a spouse and children, one can consider getting coverage of Rs 15-20 lakhs. Hospitalization expenses in India are experiencing double-digit inflation, which emphasizes the importance of factoring in medical costs for the next 5-10 years and acquiring a suitable health insurance plan accordingly."

If you have already bought insurance, it makes sense to assess and re-assess your insurance coverage each year. Since health-related problems grow with age, it serves best to raise the insurance coverage by 10 to 15 per cent after turning 30 years old to prevent shelling out a more significant premium later on. Planning is essential for both prosperity and health. Decide intelligently and invest in health insurance policies that provide comprehensive coverage.

Insurance for senior citizens and more

If you have already hit 60 years old, chances are that you already have the experience of being hospitalized or treated for some ailment or the other. People in this age group are more vulnerable to suffering from chronic lifestyle diseases including hypertension, diabetes, arthritis, and more as they get older. They might need to see a doctor more frequently, which might raise the cost of care. Palliative care is another possible fact for those with a weak constitution.

Having a health insurance plan that offers comprehensive coverage helps at this age. People in this age group must focus on availing of the benefits of a health insurance plan that provides extensive coverage for hospital stays, chronic disease treatment, and preventive healthcare.

Suresh Sadagopan, MD & Principal Officer, Ladder7 Wealth Planners says, “If one has about Rs.10 lakhs cover, that should be decent. Anything more than that would provide a further layer of security."

Buying health insurance is a must. However, opting for a health insurance policy that does not promise enough coverage can be futile. It is like having an umbrella on your head that does not shelter you from excessive heat and rain as and when you need it.

Next time, when you buy health insurance, focus on having the much-needed coverage too.


85% of the respondents would consider cutting down on some luxury items so that they could spend more on health insurance
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85% of the respondents would consider cutting down on some luxury items so that they could spend more on health insurance

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Published: 17 Apr 2023, 03:51 PM IST
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