Sum Insured in Health Insurance
  • What is the sum insured?
  • why choose the right sum insured?
  • Factor that affect's the sum insured?
Sum Insured in Health Insurance
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Importance of Sum Insured in Health Insurance

In today's fast-paced world, having health insurance is more important than ever. With the rising cost of health care and the unpredictability of illness and accidents, it's crucial to have a safety net in place to protect you and your family financially. Health Insurance Makes sure that you have access to the medical you need when you need it without breaking the bank.

In this article, we will discuss the term sum insured in health insurance.

But first, let's discuss the sum insured.

What is the Sum insured?

The sum insured is the maximum amount of money that the insurance company will pay out to the policyholder in the event of loss or damage. The insurance industry is where this important term finds its distinction, with products like Term insurance and Health Insurance in particular. In Simple words, it indicates the range of Expenses for which the insurance provider is Responsible, Indicating the Scope of Financial Assistance Provided by the Company.

What is the sum insured in health insurance?

Sum insured is the limit that shows how much the health insurance company is going to help you by paying you medical expenses that are covered under your policy. In simple words, it is the highest amount the insurance company will pay if your request for coverage is accepted under the chosen health plan.

Benefits of choosing the Right Sum insured

Choosing the right sum insured with give you the following benefits

  • Maximum financial Coverage Not having enough insurance can make you pay more out of your pocket. If you pick the right insurance, you don't need to worry about money regarding health problems. The insurance company will help with the cost of treatment and other things mentioned in the plan.
  • You don't Require to File Multiple claims The IRDAI has been allowed to file multiple claims to claim the maximum cost of medical events. But keep that in mind. Making multiple claims requires time. The claim settlement process might take time and delay financial assistance at a time of urgency. You can avoid this hassle by choosing a sufficient sum insured for a health plan.
  • Insurers can make Claims until the end of the Policy term If you choose a lower sum insured, it can lead to a quicker depletion of coverage, leaving you vulnerable to the financial obligation for additional claims. By choosing the right sum insured made sure sustained coverage throughout the policy duration.

Let us take an example

Suppose 20-year-old Simran is covered by her father's family floater health insurance plan. She had a Serious Road Accident while Returning From School. She suffered several injuries and was hospitalized for several weeks. The hospital bill was 4.5 lakh as surgery costs were also involved. Simran's father bought health insurance coverage for the whole family with a sum insured of 5 lakhs. Most of her hospital bills are borne by the insurance company except for the deductible as per the Policy terms. 1 year later, Simran's sister Priya was diagnosed with Dengue and had to be hospitalized. The hospital Bill amounted to 50,000.

Here is how the sum insured aided Simran's father financially during both instances

Parameters Case1: Simran's Accident Case 2: Priya's Hospitalization
Hospital Bills 4,50,000 50,000
Claim amount 4,50,000 50,000
Pocket Expenses 45000 5,000
Remaining sum insured 50000 0

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Factors that affect the sum insured by health insurance

  • Choose the Correct Health Insurance Plan There are multiple types of health insurance plans available in the market. Some are just for you; some cover your family; your job provides some, and there are plans specifically for serious illnesses. so, the amount of money your insurance will cover depends on the type of plan you go for.
  • Numbers of Family Members Covered Some Health insurance plans such as Family Coveage, and Employer's Group Plans, cover more people than individual plans or senior Citien policies, While deciding how much you need, consider the number of people you want the plan to protect.
  • Health history and age of the insured If someone in your family has ongoing health problems like asthma or diabetes, they might need Regular checkups, often. In that scenario, it is a good idea to choose a higher coverage amount. The age of the insured person is also very important before considering any health insurance. If you are buying for older Adults, it's good to go for more coverage.
  • Qualities of medical facilities in your area Considering certain areas, like metro cities (Delhi, Mumbai, Ahmedabad, Pune, etc.) Offering Advanced and costlier medical treatment than other locations in India. Keeping this in mind while selecting the amount of sum insured will help you decide if you need a policy with more coverage.
  • Existing Health Insurance Coverage When purchasing a new health insurance policy, it is important to know how much insurance coverage is left with your existing policy. If you are part of an employer's Health Insurance Plan. It is important to know such plans may have limitations since they end with your employment.

Kindly Note:

Having Multiple Health insurance policies can also be very fruitful. As per IRDAI, an individual can claim against more than one policy to cover the full cost of the medical event.


Overall, by understanding the relevance of critical health insurance terms, such as the sum insured to decide between buying for your personal and family requirements. While choosing a great sum insured will lead to higher premiums, it serves as a shield between your family and the high medical expenses.

Sum Insured in Health Insurance: FAQs

1. Can I Increase the sum insured in my existing health insurance?

Most health insurance companies have a fixed sum insured in their plans. So, you have to do proper research before choosing any health insurance that fulfills your requirements. You can also get in touch with your insurance provider for more info.

2. What should be the sum insured for health insurance?

Minimum 5 lakh

3. Why is the sum insured important?

It is important because the sum insured is the amount that the insurance company pays to the insurer in case of any unpredictable event.

4. Can I change my sum insured at the time of renewal?

Yes, you can change your sum insured at the time of renewal, while the cost of the premium may vary depending upon requirements.

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Simran Kaur Vij

Written By: Simran Kaur Vij

Simran is an insurance expert with more than 3 years of experience in the industry. She may have all the answers to your insurance queries. With a background in Banking, she proactively helps her readers to stay on par with all the latest Insurance industry developments.