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How Much Health Insurance Do You Need?
Mar 5, 2021

How Much Health Insurance Do You Need In India?

India is a developing country with general pricing levels rising at significant rates, and health insurance has become a primary need nowadays, so a pervasive question anyone will have is that if I live in India, how much health insurance do I need? Well, you also know that there is no direct shot answer in this. How much health insurance you should buy requires an evaluation of a varied range of factors. We find that a significant accepted rule in the market to decide your insurance cover is that it should at least cover 50 percent of your income. Well this cannot be accepted as a thumb rule and you need to consider the following factors to conclude how much health insurance should you need in India


You have to pay the insurance premium every year irrespective of any other factors. Hence sum assured should be such that you can afford the premium to be paid. Also remember, the higher the sum assured, the higher the premium amount is.

Annual income percentage

As we discussed above, it is an accepted fact that sum assured should at least cover 50 percent of your income. This may vary as per your risk-taking capacity. Generally, when it comes to health, people like to be more secure.

Family history

Hereditary can lead you to certain life-threatening diseases. So doctors insist that if you have a family history of certain diseases, regular checkups can help you with early detection and fewer chances of being fatal. These things involve costs that can be covered by medical insurance and lending you a hand by giving lesser out-of-pocket expenses.


Rising age can escalate the chances of getting ill. So the premium amount also rises with age and you may need a higher sum assured for elderly persons as compared to the youth.

Type of hospital

Categories of the hospital you prefer directly affect your medical expenses. At times network hospitals can help you with pre-decided medical expenses or certain discounts. So your choice of the hospital has to be thought about in estimating the sum assured requirements.

Current health status

Medical insurances require you to go through pre-insurance health checkups. They at times place conditions that you cannot put a claim on existing illnesses for a particular period or they may not cover existing illnesses at all. And if you have any severe existing illnesses then you will need higher coverage in your medical insurance policies.

Place of residence

Price disparity in rural and urban India is known to all. The same disparity applies to medical expenses and insurance requirements. If a person living in rural India asks ‘how much health insurance should I buy’, the answer would be x amount. Given the same circumstances, if an urban person asks the same question, the answer would be 1.5x.

Nature of job

Medical researches show that high-stress jobs increase the chances of getting ill. Moreover, some jobs may require physical skills while others may have higher risks of getting injured. All these factors should be considered to arrive at the decision of insurance coverage.

Medical inflation

Medical costs are shooting up whether it be medicines, check-ups, or surgeries. If you ask someone today ‘how much health insurance do I need’, the answer will have to be the one that accounts for current costs, the probabilities, and medical inflation

Primary or supplementary

You need to see if the health insurance you are thinking about is primary or supplementary. If this is the policy you are taking for yourself as primary policy, your needs will differ as compared to the one you are taking in addition to the one offered to you by your employer.

Extent of coverage

The inclusions and exclusions in the policy shall be studied meticulously as if the policy doesn’t cover the critical illnesses or existing diseases, you might consider the various types of health insurance and choose on as per your needs.


1.“Will my pre-existing illness get covered under this health insurance?” inquired Smriti.

The insurer always makes sure that you can claim anything related to pre-existing illness only after a certain time period also known as the waiting period is over on your policy taken.

2.What to do if you want to increase your existing sum insured?

You can either opt for a top-up plan or you can increase your sum insured on the existing policy at the time of renewal.

3.Can I claim from the insurance company more than once under the same policy?

Yes, generally the insurance company doesn’t have any limit on the number of claims made provided it is within the limits of the sum insured.

4.Is there a right time to buy health insurance?

Earlier, the better. This is because when you are healthy, you can be benefitted from a lower premium, no waiting period if you have no existing diseases, good coverage, and taxation benefits.

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