Health insurance plan contain terms that appear simple but have complicated meanings and understanding the essence of these terms is essential to avoid future confusion. One of the first questions the prospective policyholder must answer is how much coverage or sum insured he requires.
However, the question that arises in the mind of the policyholder is what is the sum insured in health insurance? Also, before we get into the details, we need to understand what the sum insured means.
Meaning of sum insured –
The sum insured is the highest amount the insurance company can pay to the policyholder in the event of a loss or damage. Full coverage under health insurance is another term for it.
So, if you are hospitalised for any reason, your health insurance provider will pay you the total amount up to the sum insured, if it is not explicitly excluded from the benefit. The policyholder is responsible for the difference if the expenses exceed the sum insured.
What effect does the sum insured have on the premium amount?
The sum insured specifies the maximum number of damages that can be covered each year in the event of an unforeseen event. The higher the sum insured, the higher the amount the insurance company is required to pay in case of a claim. As a result, the insurance premium to be paid is higher as the sum insured rises.
It is wise to compare health insurance plans prior to investing, depending upon your requirements from the insurer.
The distinction between sum assured and sum insured –
The distinction between sum assured and sum insured is a highly technical aspect of the policy. These may appear and sound similar, but they are entirely different. The sum assured is the fixed amount that must be paid upon the occurrence or non-occurrence of a specific event.
On the other hand, the sum insured is the maximum amount that will be delivered to a particular event. Sum assured is a standard clause in life insurance policies, whereas sum insured is more common in non-life insurance policies. You may probably come across the term sum insured when you purchase health insurance online or offline.
The importance of having an appropriate sum insured –
It gives you a sense of security that even if something happens to you today, your lifelong savings will not be depleted by treatment, leaving you with some money to live on in your later years. Financial security provides peace of mind and reduces stress. What could be wiser in a time when various issues constantly stress people?
A sufficient sum insured is significant if you have chosen a family floater policy. If something happens to multiple members of the same family, the financial situation of the family can become critical.
How do I select the appropriate sum insured?
- The age factor:
The sum insured is heavily influenced by the insured’s age. Ageing increases the likelihood of contracting a disease, necessitating a more comprehensive health insurance plan. As a result, the earlier we begin, the wiser.
- The current state of health:
You must review your medical history and that of your immediate family before deciding on the sum insured because some pre-existing diseases experienced by your immediate family put you at a higher risk of developing that condition sooner or later.
- Lifestyle:
We are all aware that stress causes far more harm than anything else. Aside from that, many jobs involve high-stress work, while others may expose you to a specific disease. All these factors are considered when determining the sum insured.
‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.‘
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply