How much health insurance is good
Been researching health insurance. If you have any questions, please share. Will clarify whatever I know.
BorrowerBadshah
Stealth
a year ago
What I am going to recommend is going to sound counterintuitive but works a lot.
Set aside a small sum in FD and keep it only for health emergencies (it could be 1L or 5L) depending on your savings. These amount will cover 95% of our healthcare treatments.
Now buy a super top up of 50 L or 1cr with a deductible equal to the savings amount. This will be extremely cheap because of deductible and will cover the remaining 5% tail scenarios
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Somedude
Stealth
a year ago
1. What add-ons should I value while taking term insurance? What are your choices
2. How much cover did you go for? How much does it cost per month/year
3. How long did you take the cover for?
Toph56
Stealth
a year ago
Let me answer in a different order:
1. When to take an insurance - life insurance is a way to protect your dependents from an income loss due to death. So ideal time to take a life insurance cover is when you have dependents - parents, spouse / kids, others. The earlier you take the better it is - lower premium and better protection.
2. How much it costs per year - function of how old one is and how much cover one takes. Younger one is, cheaper it is.
3. What policy and how much coverage to take - get only a pure term insurance / protection plan. Steer clear from endowment / ulips / traditional / money back kind of policies. A scientific basis to calculate how much coverage is to figure out your earning potential till you retire and work backwards. The alternate is to evaluate how much annual expenses / liabilities your dependents will have to pay off in your absence, factor for inflation and also other loans / large spends like kids education and then calculate present value of value. The rule of thumb that people keep talking about is 10X of your current annual income. I think while that may simplify the answer, may not be accurate. Alternatively you can take a policy now and then get another after a few years as the income / expenses increase or there are lifestqge changes- getting married, having kids etc.
4. How long should the policy cover - only take till your working age - let’s say from now to when you are 55 / 60. That’s the protection on income your family might need. Let me give an example - let’s say your savings and investments at 55 reaches 25 cr, a 1 cr policy won’t change any outcome materially. Also the probability of death event (and premium) increases when the coverage is for longer - so stick to working years and think of it as income protection.
5. What addons to take - some to consider - add on for disability, critical illness etc.
Toph56
Stealth
a year ago
If you can afford it go for a health insurance with as high a sum insured - say at least 1 Cr. Refer the above image. Expenses / medical inflation are hard to predict and plan for. Better to be prepared.
