Health insurance has become a must for every one these days. But it comes at a premium. It is gaining traction, more so since Covid outbreak, as individuals are looking for avenues through which they can be financial sure of meeting any health emergency. However, it may be difficult to decide how much health insurance sum assured you need.
In health insurance, sum assured refers to the maximum amount of money the policy offers to provide in case of an emergency. As treatment costs are rising, experts say that one should be careful while choosing the right amount of cover. A small sum assured may leave you disappointed in case of emergency. Even a very large sum assured not actually required, may make you unnecessarily pay very high premiums.
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“Building financial security to withstand medical emergencies is a prerequisite for a good health insurance plan. The Insured amount should be high enough to provide a decent cover for all scenarios, while also being affordable,” said mayank Kale, CEO and Co-founder of Loop.
The amount that a person needs to chose as a sum assured depends on the type of policy and the number of dependents covered under the policy.
“One must carefully choose their sum assured amount at the time of buying or renewing a Health Insurance plan now, the question is how much sum assured should be sufficient for meeting an emergency. Well, the answer to this question depends on the type of policy chosen and the number of dependents of the insured,” said ,” Ankit Agrawal, CEO and Co-founder of Insurance
Experts said that if a person is opting for an Individual Health Insurance plan, they must avail of minimum coverage of Rs 5-10 Lakh to keep themselves shielded against any possible emergency which may incur at any point in time.
If one wishes to opt for a family floater plan, the amount of minimum sum insured for meeting emergencies will primarily depend on the number of family members included under the plan.
“In the case of a typical family floater plan which provides coverage for oneself, spouse, and 2 children, the person must get a minimum sum assured of Rs. 20-30 Lakhs to be ready for combating uncertainties of life. However, ideally, an individual must go for a Family Health Insurance plan featuring a sum insured of Rs. 1 Crore to be able to comfortably meet any emergency,” said Agrawal.
Settlement of health insurance reimbursement claims on an average takes about 20 to 46 days from the date of intimation to the insurer, reveals a survey conducted by leading insurer broker SecureNow.
The survey points out that patients are quite prompt in informing the insurer about the claim with most of them intimating the concerned insurance company within a week of hospitalisation
However, on the other hand, the insurance companies take on an average between 7 to 108 days to settle the claims related to maternity. Caesarean sections take the longest time 9 to 135 days and chemotherapy the shortest period—12 to 35 days.
The data tabulated by the SecureNow makes it clear that “while patients don’t take a lot of time intimating the insurer for a claim reimbursement upon being admitted, the average time for an insurer to settle the claims is way higher. In a typical claims processing timeline, the maximum time is taken between intimation and settlement.”
Interestingly, Caesarean section delivery claim settlement time takes 25 per cent more than a typical normal delivery case.
According to the SecureNow survey, about 13 to 26 percent of the claimed amount is deducted from the final claim as they are deemed as “uncovered consumables and administrative expenses”.
As regards the cost and duration of hospitalisation, the survey said that maternity and chemotherapy have the highest per-day hospitalization costs, while dengue and other viral infections, including Covid, have the longest hospitalization of 4 to 5 days.
Chemotherapy, according to the Survey, “unsurprisingly, is very heavy on pockets for an average person despite the duration of stay for the patient being hardly a day.”
It further observed that public sector insurers are often able to negotiate hospitalisation costs that are significantly lower than private sector insurers, sometimes by as much as 50 per cent.
The public sector insurers under the General Insurance Public Sector Association (GIPSA) have a significant advantage through lower hospital rates. This translates into lower claim costs for group health insurance and consequently lower premiums.
The claims cost could be 10 to 30 per cent cheaper when insurance is bought from the PSU insurers that have GIPSA rates, said the Survey.
Kapil Mehta, co-founder of SecureNow, said “There are close to 10 million health insurance claims each year. This in itself is a sign of how the health insurance industry has evolved. The next step is to publish detailed claims information. This shines a light on the strengths and improvement areas in settling claims. Our report is an important step in that direction.”
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