Think Rs 25 lakh health insurance cover is enough? Expert drops a reality check

A Rs 25 lakh health insurance plan might sound reassuring—until reality strikes. In today’s healthcare landscape, one medical emergency can shatter the illusion that such coverage is enough for a family of four. With hospital bills skyrocketing and medical inflation climbing at 10–14% annually, experts are warning policyholders to reassess their insurance strategies.

“Most people assume that a Rs 25 lakh floater plan is enough for peace of mind. But in practice, it’s dangerously inadequate,” said CA Nitin Kaushik, a financial expert specialising in insurance and tax planning.

Kaushik highlights several misconceptions commonly held by Indian families. For starters, a floater policy doesn’t mean Rs 25 lakh per person—it’s a shared limit across all covered members. So if one family member faces a serious medical emergency, there may be very little left for the rest.

“Just an ICU stay combined with a surgery can easily cost Rs 5 to Rs 10 lakh in top private hospitals,” he said. “If it’s something more critical like cancer treatment, organ transplants, or prolonged hospitalisation, the expenses can balloon to Rs 30–50 lakh or even more.”

This is especially true in urban centres like Delhi, Mumbai, and Bengaluru, where medical costs are often among the highest in the country. Even a single procedure at a top-tier hospital can eat up a major chunk of the insurance limit in days.

Kaushik stresses that relying on a single floater plan is not a viable long-term solution. Instead, he recommends a layered approach: “Start with a base cover of Rs 10–15 lakh per individual and complement it with a super top-up policy of Rs 50–90 lakh.”

What makes super top-ups attractive is their affordability. According to Kaushik, “You can often get this enhanced protection for just Rs 700–Rs 1,000 per month. It’s a small price to pay for real peace of mind.”

He also cautions against delaying action until it's too late. “People invest for years—SIPs, mutual funds, retirement plans—but one hospital bill can undo all of it in a single blow. That’s the financial damage poor coverage can cause.”

What to check in a health insurance policy

Most financial advisors recommend a minimum base cover of Rs 10 lakh to start with. This should be reviewed at least every five years or after key life milestones such as marriage or childbirth. With medical inflation in India rising at 12–15%, timely policy upgrades are crucial.

A larger cover ensures access to quality hospitals and private rooms without compromising on care. Age is also a key factor—premiums in family floater plans are influenced by the age of the eldest member, and some plans have age entry limits ranging from 91 days to 60 years. Choose accordingly.

Opt for a policy that balances premium and coverage wisely. Be cautious of low-premium plans that hide sub-limits, co-payment clauses, or high deductibles, as they can lead to higher out-of-pocket costs during a claim.

Don’t overlook the waiting period clause, which can delay coverage for pre-existing illnesses like diabetes, thyroid, or hypertension—often between 24 to 48 months. Compare plans to choose one with the shortest waiting period.

Also check for cashless hospitalisation facilities within your city, pre- and post-hospitalisation coverage, and maternity benefits if relevant. Preventive health check-ups and a smooth claim settlement process are also essential factors that make a big difference in emergencies.

Ultimately, the best policy is one that offers comprehensive coverage, minimal exclusions, and aligns with your family’s evolving health needs.