Your Health Insurance coverage is not enough

Many people think that they have adequate Health Insurance (also known as Mediclaim). But the fact of the matter is that more than 90% of India’s population is underinsured.

It does not take very long to understand that Indians are not adequately insured. Let us assume that you are a 61-year old male retired government employee earning Rs.50,000 per month as pension. This amounts to Rs.6.00 lakhs per year. Your family consists of your wife, who is a housewife, and two unmarried children both of whom combined are earning approximately another Rs.6.00 lakhs per year. You have about Rs.60 lakhs in the bank and a couple of flats worth Rs.1 crore as assets. Let us also assume that you and your entire family have complete and unlimited Health Insurance coverage provided by the government. Now, all of a sudden, your wife develops a major malignancy in her spinal cord which requires a major transplant. Unfortunately, the government approved hospitals are not preferred by your family. So, you have to get this entire treatment done in a reputed private hospital. This requires Rs.10 lakhs for the transplant alone. Adding pre and post surgery treatment the cost comes to more than Rs.25 lakhs. Well, you do have an assured pension income, your unmarried children have their incomes, you also have money in the bank and fixed assets that you can sell off to cover the cost of the transplant and associated costs. But, Rs.25 lakhs is more than double of what you and your children earn per year. Moreover, do you know whether your wife will be fully cured and will not require further, even more costly treatment? You have unmarried children; do you know what their future expenses will be? You are getting older; do you know what your future medical and other expenses will be? When you add up all of these uncertainties, even a government employee with a good pension, bank balance, assets, and full healthcare benefits is found to be highly inadequate. If only you had a family healthcare coverage of Rs.1 crore. The premium would have cost only Rs.60,000 per year for you, your wife and your two dependent children. In 10 years you will have paid Rs.6 lakhs only and still have coverage of Rs.1 crore.

The above is a factual scenario that has occurred within 8 months in 2020-2021 at North Kolkata. And the same scenario has repeated over and over again for various other government employees and retired persons. In some cases, people have had to resort to overcrowded and low quality public healthcare just because they could not afford private healthcare. You can imagine what happens to people employed in the private sector, and people in self-employment; their situation is worse.

Of course, there are some people who are stinking rich and can afford everything under the sun. If you are such a person, then you don’t need to read this article. But, if you are not, then you need to re-examine and re-evaluate your healthcare coverage. The fact is that coverages of Rs.5 lakhs, Rs.10 lakhs, Rs.20 lakhs, all are highly inadequate. Practical healthcare coverage for a typical family should be more than Rs.20 lakhs per head. Thus, for a 4-person family the coverage should be Rs.80 lakhs combined, or at least Rs.50 lakhs floating. One insurance company in India provides coverage of Rs.1 crore for a 57-year old mother and 26-year old daughter combination at Rs.17,000 only.

Another vital point is that people with certain diseases will not get any kind of insurance. For example, if you have diabetes or heart disease, no insurance company will give you a new healthcare policy. People who develop these diseases after they take the policy will be entitled to full benefits of the policy. Thus, if you don’t want to burden yourself with family medical expenses, or if you don’t want to spoil your family’s future because of unforeseen medical expenses, you better take better healthcare coverage while you still have the chance.

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