IRDAI License Number: IRDAI/INT/ISNP/2022/250

How to decide the sum insured limit?

When you buy health insurance, you must remember that this sum insured is to be utilized in the future. Any treatment or surgery will be far more expensive on account of technology advancement and demand. If a heart surgery cost Rs 5 lakh today, it may cost Rs 20 lakh 10 years later. Rs 8-10 lakhs is the bare minimum cover you must have to protect yourself from any emergency. Also, you should buy policies that give you maximum no claim bonus for every claim free year, thereby increasing your sum insured at the same price. Adding to this, it is recommended to buy a top-up cover or super top up cover with a deductible to enhance your basic insurance. Top up and super Top up covers are cheaper than basic plans as they kick in only after a threshold has been crossed. This helps you meet any unexpected health-related emergencies without affecting your savings. Take into account the cost of quality Medicare facilities in your city and your lifestyle to ascertain the amount of Mediclaim you require.


Buying insurance cover lower than what you actually need will lead to under insurance and you will not be able to get good treatment when you need it the most. On the other hand, if you choose a very high amount, depending on your age and medical condition, then you will end up paying a much higher premium than what is necessary and lose out on better investment opportunities. This is called over insurance. Both of these scenarios must be avoided at all costs. But under insurance is far more common than over insurance.


There are many reasons for that:

Underestimating medical needs: You might miscalculate your future health-related requirements and inadvertently opt for a low amount for your policy coverage.

Over Optimism: Since you are young and living a healthy lifestyle and haven’t fallen sick in ages, there is no need for spending money on a Mediclaim policy.

Unwillingness to shell out money: Mediclaim policy can look expensive especially when you cannot see the risk today. It is common to tendency to buy a Mediclaim policy with the lowest premium.

Tax saving mechanism: You might opt for only that much policy amount which is well-suited to your tax-saving requirements and financial planning.

Ignorance about the sub-limits of the policy: Health insurance products require careful understanding of the policy benefits. Benefits like co-payment, maternity and day care etc. limit your benefit and it would be wrong that once you select the sum insured all your medical needs will be covered upto this sum insured.

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