Until a few years ago there were no options to get a sum insured (SI) of over ₹5 lakh in health insurance in India. Today, there are a handful of insurers offering ₹1-crore health cover for self and family. However, is there a need for ₹1-crore health insurance? Also, will one get benefits such as treatment outside India and a deluxe room while in hospital?

Before we delve deeper into this topic, note that health insurance plans are indemnity covers that pay for the medical bill on hospitalisation up to the sum insured. They are not like the critical illness insurance plans that pay the full amount of SI at the first instance of hospitalisation irrespective of the hospital bill.

There are still reasons for you to go for health insurances plans and not critical illness plans if you want to cover hospitalisation expenses and ₹1-crore health cover makes more sense.


The logic

In regular health insurance plans, you can make claims on the policy as long as there is SI left in the plan; the cover is renewable life-long. In contrast, the critical illness (CI) plans are one-time covers; once claimed, the policy pays the full value of cover and terminates; you can’t renew the policy again the next year. But most critical illnesses recur after a few years and by that time if you had exhausted all the money form the first claim, you will be without any back-up to pay for hospitalisation. So, it is recommended that you buy a health insurance policy that by regulation is renewable life-long and can take care of the recurring medical expenses throughout your life time.

The next question is how much cover? Treatment cost of chronic ailments, including cancer, run into lakhs of rupees. Rather than guessing how much cover you would need, you can take a ₹1 crore cover at the age of 35-40 years for your peace of mind.

As you age, if you find the premium expensive, you can reduce the SI by a few lakhs, but you would still continue to enjoy a large cover without fresh underwriting. On the other hand, if you had say ₹5-10 lakh cover and in your mid-40s want to increase the SI to say ₹25-30 lakh, there will be fresh underwriting and waiting period, and it can’t be easily done.

Currently, the ₹1-crore health plans are not expensive at all. Check this: For a 35-year-old male, in case of Max Bupa, the annual premium for ₹25 lakh SI plan is ₹14,626 and the cost of ₹1 crore plan is a lower at ₹10,992. Similarly, in case of Aditya Birla Capital, while the annual premium for ₹25 lakh SI is ₹11,245, the premium for ₹1 crore cover is ₹9,557.

Insurers price the ₹1-crore plans cheaper, assuming there are rare chances of claims over ₹25 lakh.

One thing to note that both the above ₹1-crore plans are combo plans – of base policy of ₹5 lakh and a super top-up of ₹95 lakh. The super top-up will get triggered the moment the base policy SI is exhausted. Since both the base and super top-up covers will be with the same insurer, there will be hassle-free claims process.

For a single plan of ₹1 crore, you can go for Care Health Insurance’s Care Advantage, but it is more expensive than both plans mentioned above.

A ‘no-frills’ plan

If you think that the ₹1-crore health plans will come with benefits of international coverage and high-end deluxe rooms in hospitals, sorry. There are no added frills in the ₹1-crore plans. These plans have the bare minimum necessities for someone looking for a hospitalisation cover. That said, they cover single private room accommodation, come with NCB, and cover all-day care procedures as regular plans and pre/post-hospitalisation for 30 and 60 days respectively, as usual. In Care Health’s Care Advantage plan for ₹1 crore, however, all category rooms, including suites are covered.