Recommended health cover.
Recommended sum insured
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Your breakdown
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Why most Indian families are under-insured on health
The corporate group cover from your employer feels like enough until you actually use it. A Rs 5 lakh group policy sounds generous, but a single ICU stay in a metro private hospital, a bypass, a cancer treatment cycle, or a complex surgery can run past Rs 10 lakh on its own. And the group cover vanishes the day you leave the job. The honest answer to how much cover you need has gone up sharply, because medical inflation in India runs around 12 to 14 percent a year, far ahead of general inflation. A sum insured that looked comfortable five years ago is thin today.
This calculator suggests a family-floater sum insured by scaling three factors: the cost of care in your city tier, the number of people on the policy, and the age of the eldest member, since claims and premiums both climb with age. It is guidance, not a precise quote, but it gets you to a sensible target instead of guessing.
How the recommendation is built up
The model starts from a city-tier base, then adds cover for a larger family and for older members. A metro starts at Rs 10 lakh because that is roughly the cost of one serious hospitalisation in a top private hospital in Mumbai, Delhi, or Bengaluru. Tier-2 cities start lower at Rs 7 lakh, and smaller towns at Rs 5 lakh, reflecting genuinely lower hospital tariffs. A family of four or more adds Rs 5 lakh, since a floater is shared and one big claim can exhaust it for everyone. Crossing 50 and 60 in age each add a further layer.
A worked example: a metro family of four
Consider a family of four in Bengaluru, with the eldest member aged 40. Here is how the suggestion stacks up.
So this family should aim for around Rs 15 lakh of floater cover. The smart way to reach it is not a single Rs 15 lakh policy, which is expensive, but a base policy of Rs 10 lakh topped with a super top-up of Rs 10 lakh over a Rs 5 lakh deductible. The super top-up costs a fraction of extending the base, because it only pays once the deductible is crossed, which is exactly the big-claim scenario you are insuring against.
The 80D tax break on your premium
Your health-insurance premium is deductible under Section 80D, but only under the old tax regime; the new regime, which is now the default, gives no 80D. Under the old regime you can claim up to Rs 25,000 for premiums covering yourself, spouse, and children, and a further Rs 25,000 for premiums on your parents, rising to Rs 50,000 if your parents are senior citizens. So a young person insuring senior parents can deduct up to Rs 75,000 a year. There is also a Rs 5,000 sub-limit within these caps for preventive health check-ups. Do not let the tax tail wag the dog though, buy the cover you need for protection, and treat the deduction as a bonus.
Features that matter more than the headline number
A large sum insured with bad fine print is worse than a modest one done right. When comparing policies, look for no or low room-rent capping, because a percentage cap on room rent silently scales down your entire claim. Check the list of permanent exclusions and the waiting periods for pre-existing diseases, typically two to four years. Prefer policies with no co-payment for younger buyers, a restoration benefit that refills the sum insured if you exhaust it mid-year, and a wide cashless hospital network in your city. These features decide whether a claim is smooth or a fight.
Floater or individual policies for the family?
A floater is cheaper and works well when everyone is reasonably young and healthy, because you share one large pool. The weakness shows when an elderly parent is included, since the premium for the whole floater is priced off the oldest member. A common structure is a floater for the young nuclear family and a separate individual or senior-citizen policy for ageing parents, which usually costs less overall than forcing everyone into one floater.
Does buying more cover later get harder?
Yes, which is the case for buying enough early. Premiums rise with age, and once a condition is diagnosed it becomes a pre-existing exclusion or loads your premium on any new policy. Locking in adequate cover while you are young and healthy, and increasing the sum insured gradually before problems appear, is far easier than scrambling for cover after a diagnosis.