Are you choosing an Rs. 5 lakh health insurance plan for yourself and your family? It is essential to determine whether this coverage amount will be sufficient to meet the increasing medical expenses. A 5 lakh health insurance policy at first glance might appear sufficient, but there are several factors to consider, such as health condition, age and city of residence.
With medical inflation in India, even a minor surgery can be expensive. Read on to familiarise yourself with the importance, benefits, and details of Rs. 5 lakh health insurance.
What is 5 lakh medical insurance?
A Rs. 5 Lakh health insurance means the total amount an insurance company covers in any financial year has a limit of Rs. 5 Lakh. If your medical bills exceed the allocated amount in a particular year, you need to pay the additional amount out of your pocket.
This health insurance plan is ideal for those willing to cover basic needs against high medical expenses without a high premium payment. However, the plan includes hospitalisation costs such as doctor fees, room rent and medical examinations.
Is a Health Insurance Coverage of 5 Lakh Sufficient?
The sufficiency of a 5 lakh health insurance premium changes as per scenarios in life. Some of the scenarios to consider are:
- Normal Circumstances
Under normal circumstances, an individual usually does not spend Rs. 5 lakh and above for meeting medical expenses in any particular year. If you are healthy and face no accidents, your medical expenses will remain below the desired limit. In this scenario, a 5 lakh medical insurance premium will be adequate.
- Old Age
As people age, their costs of treatment also increase in comparison with a 25-year-old. Thus, they also tend to develop a number of health conditions. Regular check-ups become mandatory for them. Diagnostic procedures are also essential to check for underlying conditions.
Considering this condition, a 5 lakh medical insurance policy will not be sufficient to meet all these costs. Hence, it is recommended to opt for an amount of more than Rs. 5 lakh of medical insurance, particularly for senior citizens.
- Underlying Medical Conditions
If you have an existing medical condition that triggers more after you buy health insurance, your medical costs will be higher. The total estimated amount depends on the kind of medical condition.
If you are diagnosed with diabetes, which is manageable with medicine, your medical expenses will be less and easily covered under Rs. 5 Lakh. Whereas, if it is cancer, opting for high insurance coverage will be essential.
What are the Advantages of Having a 5 Lakh Health Insurance Plan?
Some of the distinguishing features and benefits of having a 5 lakh health insurance plan include the following:
- Affordable Payment of Premium: Individuals willing to cover the basic medical expenses with an affordable premium amount, the 5 Lakh health insurance plan is adequate.
- No Need for Pre-Medical Checkup: Choosing this plan does not require any pre-medical checkup. This applies to individuals aged 50 years and above.
- Comprehensive Coverage: This plan offers individuals comprehensive coverage facilities against medical expenses that include surgery, hospitalisation and other complicated treatments.
- Cashless Hospitalisation: Choosing this plan offers you cashless hospitalisation facilities at the respective network hospitals. This denotes you need not pay for any additional medical expenses out of your pocket.
- Coverage for Daycare Facilities: This 5 lakh health insurance plan consists of daycare procedures also. These are medical procedures where there is no need for hospitalisation for 24 hours or more.
- Renewal Facility: This plan provides the benefits of the annual renewal process, ensuring you can avail comprehensive coverage against other medical expenses.
- Coverage for Other Treatment Options: Choosing this plan provides you with alternative treatment options that include Ayurveda, Homoeopathy, Unani and others up to the sum insured.
- Lifetime Renewability: The 5 Lakh health insurance plan provides lifetime renewability. This means you are eligible to renew the policy even after attaining the age of 60 years and above.
- Family Floater: You can choose a family floater option with a 5 lakh health insurance plan. Health insurance plans for family allow you to include the entire family under a single comprehensive policy.
What are the disadvantages of having a 5 lakh health insurance plan?
While a 5 lakh health insurance plan provides essential protection with several benefits, there are certain limitations as well. Let’s understand the drawbacks of having 5 lakh in health insurance:
- Inadequate Coverage: A 5 lakh health insurance plan might not provide sufficient coverage for all medical costs. Thus, your health insurance might fall short if you need major surgery or hospitalisation for a prolonged period.
- Out-of-Pocket Expenses: Even choosing a 5 lakh health insurance plan, you might need to bear additional costs and pay out of your pocket. However, this plan does not always cover consumables and other non-medical expenses.
- Limited Security: With rising medical expenses in India, a 5 lakh medical insurance might not be a suitable choice in the long run. A treatment cost of Rs. 4,00,000 in 2025 might cost over Rs. 5,00,000 during the next five years.
- Shared Sum Insured for Floater Plan: The insured sum amount in a family floater plan includes all family members in the plan. Thus, a 5 lakh health insurance policy will fall short if multiple members of the family fall ill or need treatment during the same year.
Overall, a 5 lakh health insurance policy might be beneficial for young individuals but might not be sufficient if there is any major health emergency or prolonged stay in the hospital. Please review your medical coverage and consider including top-up plans, if necessary.