Wise choice: Increase the sum insured with age

The health insurance that you bought when you were young will become inadequate as you age as because you are prone to more health issues and also you get used to a better standard of living. Also, healthcare inflation is increasing at nearly 20 per cent every year which will eat up your savings.

So, it is the right decision to keep revising the sum insured upwards as you grow older. There are two options for this:

1) Simply increase the sum insured in your existing policy

Some health insurance policies offer a 5 or 10 per cent annual increase. However, other companies don’t offer to increase the sum insured on an ongoing basis. If no claims are made then the sum insured in a can increase on next renewal because of loyalty bonus and no-claim bonus.

2) Buy a top-up cover

In a top-up policy a specific amount can be paid at the time of purchase as deductible or threshold limit. Now the minor expenses will be covered by the basic health policy and top-up plan will take care of expenses beyond that. Top-up provides a wide protection at a very affordable premium instead of having to buy a full base cover policy.

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About the Author: Soumava Chakraborty