Stories
Why Your Rs 10 Lakh Health Cover May Not Be Enough Due To Inflation
- •Medical inflation in India ranges between 12 to 14 percent annually, making fixed health covers inadequate over time.
- •Inflation-linked health insurance features automatically increase the sum insured or offer cumulative bonuses to combat rising costs.
- •A growing sum insured does not guarantee full payment of hospital bills due to room-rent limits, co-payments, and sub-limits.
- •Combining a base policy with a super top-up plan is an effective way to secure higher protection at a lower cost.
- •Policyholders should carefully review the fine print, premium increases with age, and caps on inflation-linked benefits before buying.
Key Questions Answered
Medical inflation in India currently runs between 12% and 14% annually. If expenses rise at roughly 10 percent a year, a Rs 10 lakh health insurance cover's purchasing power drops to about equivalent to Rs 3.86 lakh after 10 years, making a fixed sum insured inadequate over a long tenure.
Inflation-linked policies lack a single standard structure, but some insurers automatically increase the sum insured by a specified percentage each year. Others provide cumulative bonuses during claim-free years, or allow policyholders to add a super top-acking feature to help counter rising medical costs.
Policyholders can pair a reasonable base policy with a super top-up, which offers extra protection after crossing a specific deductible while usually costing less than buying a full basic policy. For example, someone might combine a Rs 10 lakh base policy with a Rs 50 lakh super top-up depending on their needs.
