Health Insurance sum assured should increase every 2 years

Many a times our customers or clients ask us what should be the sum assured under Health Insurance policy? Should I increase the sum assured this time?

The logic demands that sum assured or Health insurance policy should be fulfilling the following criterion:

    (a)  Cover the risk to a reasonable extent – need not be highest

    (b)  Should be Cost effective – where pocket permits

While in the case of motor vehicle sum assured (IDV) – goes down year after year due to depreciation / obsolescence of the vehicle, the situation changes for Health Insurance as t with increase in age of the insured the risk also increases and all of us (including Health Insurance provider )  know that it goes on increasing with passage of time .

The reasons are

As you grow older the need for hospitalization definitely increases as some diseases are age related and are bound to affect most of us and some examples are:

(i)        Hernia
(ii)      Cataract

(iii)    Prostrate

(iv)     Hysterectomy

(v)      Arthritis (Knee replacement)

(vi)    Many others Critical Illness like Cardiac / Cancer

We find that on the one hand need is increasing and at the same time up gradation of Medical Technology ( Equipment /diagnostic) results in availability of better treatment / painless treatment to the patient .Some of  examples of up gradation of Medical Technology are :

(i)      Lasic Surgery ( day surgery ) vs. Traditional Cataract Surgery (3 days stay  in hospital )

(ii)     Advanced MRI  vs. MRI vs. CAT vs. X-RAY Digital vs. X-RAY

(iii)    Even  in Coronary Stent In plants you have choice of

Traditional Metallic Stents      Rs.40000
Drug eluting Stent                   Rs.150000 (higher by 275%)

Bio Degradable Stent              Rs.300000 (higher by 650%)

It is natural that Bio Degradable Stent will be better / more effective than Traditional Metallic Stents.   In Times of India – Oct 07, 2013. We came across good information from Mr. Sanjay Datta (ICICI Lombard).

“Treatment costs have gone up by 50-60% in some cases such as arthritis and brain stroke. Several other ailments such as spinal cord disorders, heart stroke, and hip and thigh fracture have witnessed an increase of 25 to 50% in treatment costs”.

In the same context we have comment of Mr. Suresh Sugathan, Head of Health Insurance at Bajaj Allianz General Insurance.

“The costs of robotic surgery on average are 25-35% higher than conventional surgery. What typically happens is that the doctor offers the patient a choice between a traditional option and a superior technique”.