What Is Sum Insured in Health Insurance?
In today’s world, health insurance is a need. A thorough health insurance policy is something that safeguards you and your loved ones against unforeseen medical costs that may significantly deplete your funds. However, it’s crucial to get health insurance coverage only after thoroughly reviewing the terms and definitions.
The sum insured is one of the key concepts of your health insurance. Therefore, it is crucial to understand what the sum insured is and how it affects your health insurance coverage.
What is sum insured in health insurance?
The word “sum insured” in the context of health insurance refers to the most amount the insurance provider pays you if you need to be hospitalised within a given year. Sum insured is not a form of compensation. It is a refund of the costs you incur during a medical emergency, such as a hospital stay, whether it is cashless or not.
For example, if you or your family gets hospitalised due to some ailment, the cost would include the room rent, tests and cost of procedure, doctor visits and medicines among other things. If the total cost comes up to Rs.2 Lakhs and the sum insured is of Rs.4 Lakhs, your policy would cover the cost.
Any amount that exceeds the insurance limit is your responsibility to pay. However, the insurance provider may cover the entire expense if the medical bills or hospitalisation expenses are less than or equal to the covered amount. The concept of the sum insured is based on the indemnity principle, which states that the insurance provider pays for losses or damages.
What effect does the sum insured have on the health insurance premium?
The amount insured, as stated, directly affects your health insurance premiums. The maximum cap on costs that can be covered in a year against any bad event is technically referred to as the sum insured in the context of health insurance.
Why is choosing the correct sum insured in health insurance important?
For your health insurance coverage to be foolproof and able to financially safeguard you and your family from any medical emergency, choosing the appropriate sum insured is essential. The main goal of a health insurance policy could be defeated if the improper or insufficient sum insured is chosen.
What is health insurance if it cannot fulfil your entire need during an emergency. Imagine, for instance, that you made the correct choice to get a health insurance policy and are now at ease because you are aware of your financial security. But when a medical emergency leaves you with a hefty hospital bill, you realise your health insurance’s maximum payout is insufficient to cover the costs. In the end, you have to pay the fees out of your pocket, which adds to your already stressful emotional situation.
Therefore, it is important to choose an insurance sum large enough to cover your medical costs completely. Check out the health insurance premium calculator to learn how your premium payment is affected by the choice of the sum insured.
Conclusion
In general, be aware of what is health insurance and the significance of key terminology in health insurance, including “sum insured,” and make sure the amount you select is appropriate for your requirements and your family’s needs.
Although a bigger sum insured entails higher rates, it spares you the financial strain during a trying emotional moment. Furthermore, a bigger sum covered has become inevitable given the constantly expanding cost of healthcare. Pick your health insurance policy carefully!
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