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

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

Factors that affect the sum insured by health insurance

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.

Conclusion:

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.