With advances in medical science offset by rising pollution, antimicrobial resistance and lifestyle diseases, Indians are living longer without living healthier. Meanwhile, surveys show over half of India’s health insurance policyholders are under-insured. Even routine procedures now cost ₹1 lakh, and with medical inflation at 15.3%, costs are rising. So how much is enough? We show you how to calculate the right coverage:

The premium you can afford

Your premium drives your Sum Insured. Try to invest around 3-5% of your annual income, but even if you can’t immediately afford the cover you want, get at least some insurance (and supplement it with Top-ups). Remember, you can always increase coverage later, but don’t be uninsured.

Your income

As a rule of thumb, your coverage should be around your total annual income, or half your annual income plus the figure you’ve spent on healthcare in the last four-five years.

Other sources of insurance

Get personal insurance even if you have employer-provided health insurance. Employer-provided plans are not very comprehensive and you may lose benefits when you leave. Buy at least a Top-up product for more protection.

Your family history

If your family has a history of diseases like diabetes or cancer, you may be at risk. Increase your coverage and buy insurance as early as possible, to lower your premiums and get covered before you suffer any medical condition that the insurer might exclude.

Your age

If you’re buying insurance young, buy early to get lower premiums. Set an initial coverage amount (e.g. ₹10 lakh) and raise it about 10% every year. If you’re middle-aged, buy higher coverage because as you get older you’ll have less scope to raise coverage and costs will only increase.

Your area and hospital preferences

Costs can vary significantly based on the quality of hospital you want and the city/town where you live. E.g. a knee arthroplasty can cost twice as much if you choose a foreign implant instead of the Indian one.

So what’s the cover you need?

There are some rules of thumb. One option is to study the five or ten most common major procedures and calculate an average cost (factor inflation into your calculations).

Experts recommend that your coverage should at least cover a bypass, and suggest a minimum cover of ₹5 lakh. For younger policyholders, ₹5 lakh should be reasonable for most cities. For middle-aged policyholders, a cover of ₹6-7 lakh is more appropriate depending on your area. For older policyholders, ₹8-9 lakh is recommended. Senior citizens should take coverage of at least ₹10 lakh.