Health insurance calculator: How much cover do you need by age, city and family size?

A ₹5-10 lakh health cover that once seemed adequate may fall short as medical costs rise. Industry estimates put medical inflation at around 12-14% a year. A single cardiac procedure or cancer treatment in a metro hospital can cost ₹15-25 lakh or more. This makes the right sum insured increasingly dependent on your age, location, family and health needs.

Your health insurance requirement should not be based simply on your income. Age is a key factor because medical costs generally rise as you get older. One expert illustration suggests that if ₹5 lakh is adequate for a 30-year-old today, applying 6-8% inflation could mean needing around ₹15 lakh by age 50. A two-adult floater could require roughly ₹30 lakh.

Family size and health history also affect the amount of cover you need. A family floater shares one sum insured among multiple members, and generally needs to be larger than individual coverage. One expert recommends considering at least three times the individual sum insured for a family floater. Pre-existing conditions and family medical history should also be factored into your decision.

Where you live can significantly affect healthcare costs. One expert suggests individuals in metro cities consider at least ₹15-20 lakh of cover, while another recommends ₹25 lakh. For tier-2 and tier-3 cities, ₹10 lakh is suggested as a minimum by one expert. But remember: you may have to travel to a metro for specialised treatment, so factor those higher costs into your coverage.

Experts recommend keeping elderly parents out of your family floater and buying a separate policy for them. Their healthcare expenses can consume the shared sum insured and leave less cover for other family members. Treatment costs also rise sharply after 60. Data cited in the article shows average claims of about ₹1.77 lakh for people over 60, versus ₹65,000 for those under 25.

A large health cover can be structured as one policy or as a smaller base policy combined with a super top-up. For example, with a ₹10 lakh base and ₹20 lakh top-up, a ₹15 lakh hospital bill would first use the base cover and the remaining ₹5 lakh could be covered by the top-up. The more cost-effective option depends on your needs, policy terms and affordability.

A super top-up can provide additional protection at a lower initial premium, but it may come with restrictions and can become more expensive as claims increase. A sufficiently large single policy can offer simpler cashless claim processing because you do not have to coordinate between multiple insurers. If base and top-up policies are with different insurers, reimbursement may sometimes be required.

Buying adequate coverage once is not enough. Experts recommend reviewing your sum insured at least every two years and whenever major life events occur, such as marriage, having children or retirement. Starting early can help because developing an illness later may make it difficult to increase coverage. Your employer's health cover may also end after retirement.

Health insurance may not cover every expense. A separate medical corpus can help meet costs such as waiting-period expenses for pre-existing diseases, dental treatment, diagnostics and experimental treatments. It can also provide a buffer if a claim is rejected or premiums become unaffordable. Build this fund separately, because unlike insurance, your savings are depleted when you use them.