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What's the Perfect Medical Insurance Sum Assured for a Family Like Mine?

Ramalingam Kalirajan |7172 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 24, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by BR on Jul 13, 2024Hindi

What should be an ideal medical insurance sum assured for a family of 4 Husband : 44yrs, wife : 40 yrs, Two kids: 12 & 4 yrs to have a safe amount post retirement

Ans: 1. Assessing Medical Insurance Needs:

Family Health Risks:

Consider the health risks and history of each family member. Health insurance should cover possible medical expenses, including hospitalization, treatments, and emergencies.
Future Medical Costs:

Medical costs tend to rise over time due to inflation. Estimate future medical expenses by considering the current average costs and projected inflation rates.
2. Determining Sum Assured:

Current Coverage:

For a family with members aged 44, 40, 12, and 4 years, a basic coverage amount might not suffice. Higher coverage is advisable to avoid underinsurance.
Sum Assured Recommendation:

Minimum Coverage:

A sum assured of Rs. 10 lakhs to Rs. 15 lakhs per family member is typically recommended. This amount should cover a wide range of medical expenses and treatments.
Optimal Coverage:

For better security, consider a sum assured of Rs. 20 lakhs to Rs. 30 lakhs for the entire family. This amount can offer more comprehensive coverage and protect against high medical costs in the future.
3. Additional Considerations:

Inflation Protection:

Opt for policies with inflation protection features that increase the sum assured over time to keep up with rising medical costs.
Comprehensive Coverage:

Ensure the policy covers a wide range of medical conditions, including critical illnesses, pre-existing conditions, and maternity benefits if applicable.
Cashless Facility:

Choose a plan with a broad network of hospitals that offer cashless treatment, reducing out-of-pocket expenses during medical emergencies.
Policy Features:

Look for features like no claim bonus, annual health check-ups, and coverage for preventive care.
4. Reviewing and Updating Coverage:

Regular Review:

Review the insurance policy annually or after major life events (e.g., children growing up or significant health changes) to ensure it meets the evolving needs of your family.
Consult a Professional:

Consult a Certified Financial Planner to evaluate your specific needs and recommend the most suitable sum assured based on your family's health profile and financial situation.
Final Insights

An ideal medical insurance sum assured for a family of four, consisting of a 44-year-old husband, a 40-year-old wife, and two children (12 and 4 years), should ideally range from Rs. 20 lakhs to Rs. 30 lakhs. This amount provides adequate coverage for potential future medical expenses and ensures financial safety post-retirement. Always consider future medical inflation, policy features, and consult with a Certified Financial Planner for tailored advice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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