Medical inflation may significantly increase healthcare expenses over time. A treatment that costs Rs 5 lakh today, is likely to cost double or even more than that in around 6 to 7 years. This means that a simple health cover may not be adequate while choosing your insurance plan.
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Hospitalisation, surgeries, medicines, diagnostic tests and specialist consultations can all become more expensive over the years. As a result, when you are picking health insurance, you must consider your current healthcare needs as well as potential future expenses.
For this, you must understand how medical inflation can impact your insurance and what you can do to minimise its effect.
- Choose adequate coverage: You should not base your sum insured only on your current medical expenses. You can check the average medical inflation rate to consider what same treatment might cost in 10 years time and accordingly select a plan.
- Consider inflation protection: You can look for policies that offer automatic increases in coverage, such as cumulative bonuses or restoration benefits. This will help you stay financially protected even if you use your policy more frequently.
- Review room-rent limits: Such restrictions can increase your out-of-pocket expenses. This is why you should review all features of the policy beforehand to understand where additional costs can arise over time.
- Check exclusions: Specific treatments can come with certain exclusions or additional conditions. Your policy document already clarifies these details, which you should read thoroughly to avoid any surprises later.
- Review your policy regularly: Reassess your coverage and the premium being paid by you annually. Some insurers provide additional coverage for critical illness, other riders with slightly higher premiums, which can suit you if your base sum is less.
When picking a health policy, you must ensure that rising treatment costs do not put excessive pressure on your savings. An emergency fund, small add-ons to existing policy and periodic review can help you stay protected from medical inflation, ensuring that it does not impact your other financial goals.
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