What is Sum insured in Health Insurance?
Understanding the Sum Insured in Health insurance
If you are one of those first-time policy buyers certain terms could be completely new to you. It’s important to understand the insurance jargon to make the right decisions. As a policy buyer, you should know what sum insured means and its overall impact on buying the right policy.
What is SI in Health Insurance?
The maximum amount that the insurance company will agree to pay the policyholder in the case of a medical emergency or expenses incurred due to hospitalisation is known as the “Sum Insured”. Under health insurance, it refers to the maximum coverage. It is important to note that if the actual costs are greater than the Sum Insured, the policyholder is responsible for paying the exceeded amount.
For instance, your top health insurance coverage has a 3 lakh sum insured, you got hospitalised twice during a specific year. Your hospital cost for the first time hospitalisation was 2 lakh rupees, and for the second time, it was 3 lakh rupees. Your total hospital bill was 5 lakhs, but the maximum amount covered by your health insurance is only 3 lakhs. In this case, your insurance provider will cover 3 lakhs of your hospital expenses, leaving 2 lakh for you to pay from your pocket.
How is Sum insured determined?
- Lifestyle habits: Today’s lifestyle, such as sedentary living, unhealthy food habits, etc., has increased health risks. It is advisable to have a higher sum insured to ensure you have adequate protection in case of certain unexpected circumstances.
- Age: Early twenties and thirties could choose a bigger of it, as they can more easily opt for a higher sum insured at reasonable prices. Because your medical bills might rise as you become older, this higher sum insured can be helpful later in life.
- Health History: It varies based on the person’s health condition. This may be higher for people with health issues like diabetes, heart diseases, blood pressure, etc. However, it is advisable to opt for this, as it will provide necessary financial back-up in times of need.
- Members covered: It will vary based on the number of people covered under the policy. Choosing the policy with adequate sum insured will secure you and your family from medical expenses.
Tips for determining the right Sum insured
Researching and comparing quotes from different insurance providers give you the benefit of understanding and choosing the right policy that works for you.
It might be essential to choose a high sum insured in particular, if you are choosing a family health insurance plan that can cover the needs of an insured family members. So, you must choose it suitably for all policies, even for individual health insurance policies.
What does the Sum insured in Health insurance depend on?
- Age: The medical condition risk increases with age.
- Lifestyle: A few habits like smoking and drinking could affect your overall health, thus increasing your premium amount.
- Health history: If you or your family have a history of chronic diseases, you may require a higher of it
- Number of dependents: If you have more dependents, then the higher it should be.
- Income: Your income decides how much of it you need.
- Plan type: Critical insurance plans may need a higher of it.
- Family-floater or group medical policies: These best policies cover more people, as they may need a higher of it.
Sum insured vs Sum assured
Let’s discuss the major difference between the sum insured and the sum assured. The sum assured refers to the guaranteed amount paid out to beneficiaries as the result of an insured event. In contrast, the sum insured refers to the maximum amount your health insurance company will pay to cover your loss.
How does a premium differ from the sum insured in health insurance?
In health insurance, let’s see the difference between the premium and the sum insured.
| Category | Premium | Sum Insured |
| Definition | In the health insurance sector, the premium refers to the periodic payment you make to have your coverage. | In health Insurance, the sum insured refers to the maximum amount the insurer will pay for your medical or health care expenses during the policy period. |
| Understanding its Meaning | It is the amount you pay the health insurance company regularly (monthly, quarterly, annually) to maintain your health insurance policy active and get benefits. | It refers to the maximum amount your health insurance plan will cover for your health care expenses during the policy period. |
| Impact | Several factors like your age, gender, location, medical history, and the specific coverage you select influence the premium. | It is a main factor in choosing your premium. A higher sum insured offers greater coverage, but it also means a higher premium. |
| Relation between premium and sum insured | A higher sum insured means a higher premium, as the insurer is exposed to a larger amount of claims. | It is a key factor in deciding the premium amount. A higher sum insured means that the insurer is exposed to larger potential claims, so a higher premium. |
| Impact of Policy Types on them | The premium in health insurance differs based on the type of health insurance policy. | It differs based on the policy type in health insurance. |
| Impact of Health History on them | Health insurance premiums differ based on health history. | It differs based on health history in health insurance. |
| Impact of Place you live on them | Premiums in health insurance differ based on areas. | It can vary depending on the place or location of the insured individual in health insurance. |
The sum insured decides the premium, meaning a higher sum insured amount leads to a higher premium because of the greater potential payout.
Conclusion
Understanding the relevance of certain essential insurance terms, and ensuring you choose an amount as per your family’s needs have become very important. Understanding that each member has unique requirements, Star health insurance offers various plans with wide sum insured options at affordable premiums.
HELP CENTRE
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FAQs
What is sum insured in health insurance in India?
<p>Sum insured is defined as the maximum amount that the policyholder can claim below a health insurance plan in a policy year.</p>
What is the sum insured in Health insurance example?
<p>Let’s see the sum insured example. Think you have a health insurance plan with a sum insured of Rs 10 lakhs. At the time of the policy year, you raised the first claim for Rs 7 lakhs. As the claim amount is less than Rs 10 lakh, the insurer will pay the whole claim amount.</p>
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The information provided on this page is for general informational purposes only. Availability and terms of health insurance plans may vary based on geographic location and other factors. Consult a licensed insurance agent or professional for specific advice. T&C Apply. For further detailed information or inquiries, feel free to reach out via email at marketing.d2c@starhealth.in