Health insurance: how much cover is enough?
Health insurance protects the thing every other money plan sits on: your savings. One serious hospitalisation — a cardiac procedure runs ₹3–5 lakh+, major cancer treatment ₹10–25 lakh+, a metro ICU ₹25,000–50,000 a day — can undo a decade of careful SIPs in a month. And the problem compounds, because medical costs inflate at roughly 12–14% a year — double the thali:
Approximate, illustrative costs — actual bills vary widely by city, hospital and condition.
The employer-cover trap
"My company covers me" is the most common — and most fragile — answer in India. Three cracks: it vanishes when the job does, including the gap between jobs when you're least protected. It's usually small — ₹3–5 lakh, designed for the average employee, not your family's worst year. And it ends at retirement — exactly when claims become likely and fresh policies become expensive or unavailable. Employer cover is a bonus layer, never the foundation.
So how much?
A working anchor for today: ₹10 lakh of family cover as the floor in metros; ₹5–10 lakh in smaller cities — then let the medical-inflation chart above talk you upward, because cover bought for today's prices meets tomorrow's bills. But here's the part most people never hear: you don't need to buy one giant policy. The smarter structure is base + super top-up:
The super top-up only activates above the deductible, so it's priced cheap — which is how a middle-class family holds ₹25–30 lakh of real protection at a mid-range premium. This structure alone is worth the advisor conversation.
The types, in one paragraph each
Individual vs family floater: a floater shares one cover across the family — efficient while everyone's healthy, worth splitting as parents age. Super top-up: the cheap upper layer above your base or employer cover — the workhorse structure above. Critical illness: pays a lump sum on diagnosis of listed conditions — it covers the income you lose, not just hospital bills, so it complements rather than replaces regular cover. Personal accident: cheap, often ignored, covers disability that stops income.
Buy young — the argument nobody makes loudly enough
At 28, cover is cheap, no conditions are excluded, and the waiting periods (2–4 years for pre-existing conditions in many policies) finish long before you're likely to claim. At 45, all three flip against you. Health insurance is the one product where waiting to "need it" guarantees you'll get it on the worst terms. Quick checklist when comparing: room-rent limits (the sneakiest clause — a low cap proportionally cuts the entire claim), waiting periods, restoration benefit, no-claim bonus, and the insurer's claim-settlement record.
General financial education, not advice or solicitation of any product. All costs and premiums approximate and illustrative. Insurance is the subject matter of solicitation — evaluate policies and exact cover amounts with a qualified, licensed advisor.
Related reading: Life insurance: which type, and how much? · 20 years of Indian money, in six charts