General
Life
Sum Insured (SI) in Health Insurance
Sum insured in health insurance decides how much financial protection you and your family actually get during a medical emergency. In simple words, a sum insured is the maximum amount your insurance company will pay for your hospital bills in a policy year.
If your medical expenses go beyond this limit, you have to pay the remaining amount from your own pocket. That’s why choosing the right sum insured is just as important as choosing the policy itself.
0% GST
on Health Premiums
I agree to the Terms & Conditions
Get Exclusive Porting Benefits
Check Prices
×
Buy Health Insurance, Up to 20% Discount
Port Existing Policy
9000+
Cashless Hospitals
2.5 Crore+
Lives Insured
4.5 Lacs+
Claims Settled
What is the Meaning of Sum Insured (SI) in Health Insurance?
Sum Insured (SI) is the maximum amount that is provided to you (the insured) in case you make a claim due to a medical emergency, treatment for illness, etc. It is directly based on the concept of indemnity.
So, when you make a claim, you will get a reimbursement for the costs spent on the medical treatment. If the cost of the treatment is less than or equal to the sum insured, the insurance company will cover the entire bill amount. However, if the costs of treatment or hospitalization exceed the sum insured, you will have to bear the extra cost beyond the SI yourself.
In short, the sum insured is an indemnity-based reimbursement you can get in case you make a claim with your health insurer.
All non-life insurance, like health insurance, home insurance, motor insurance, etc. offers this sum insured.
How Does Sum Insured (SI) Work in Health Insurance?
The Sum Insured (SI) in a health insurance plan is the maximum amount the insurer will reimburse for medical expenses during the policy period.
Let’s understand it with an example:
Mr. Akash is 24 years old and was admitted to the hospital for treatment of a neuro problem. He had a health insurance policy with a sum insured of INR 5 lakh, and the cost of hospital bills generated for a week of hospitalisation was INR 3 Lakh.
The insurance company paid most of the expenses. Later in the year, he again had an accident and was admitted to the hospital, which raised a total bill of INR 5 Lakh.
Here is how the sum insured worked for Mr. Akash:
Disclaimer: The above cost is for representation purposes only. The cost and claim may vary depending on deductible, copay and type of policy.
In the second incident, Mr. Akash has to pay INR 3 Lakh out of his pocket. Hence, it is important for you to have a higher coverage to cover you thoroughly during an emergency.
Sum Insured in Health Insurance Simplified
Imagine you're shopping for groceries and deciding on a budget for the week. This budget ensures you can buy everything you need without overspending. Similarly, health insurance's "sum insured" acts as your financial safety net during medical emergencies.
The sum insured is the maximum amount your insurer will cover for your medical expenses in a policy year. Watch this video to understand the sum insured and tips to choose the sufficient sum insured in your health insurance policy.
Importance of Choosing the Right Sum Insured in Health Insurance
Selecting the appropriate sum insured is essential to guarantee that your health insurance policy is infallible and capable of providing you and your family with financial security in the event of a medical emergency. Here are some reasons to select the right sum insured in health insurance:
Can You Increase Your Sum Insured in Health Insurance?
Yes! There are many ways that you can increase your sum insured:
- At the Time of Renewal – When you renew your health insurance policy, just ask your insurer to increase the sum insured to the desired amount. (Remember that this will also increase your premium slightly)
- Through Cumulative Bonus – For every claim-free year, some insurers will increase your sum insured by a certain amount, known as a Cumulative Bonus. With Digit’s Infinity Wallet Plan, on every claim-free year, your SI will increase by 50% (up to a maximum of 100%)!
- Get a Top-Up Plan – You can also opt to buy a top-up or a super top-up plan from your insurer to get coverage over and beyond your original SI.
Factors to Choose the Right Sum Insured in Health Insurance Policy
It is very important to use the right sum insured for your policy. Want to know why? Here is an example:
You just bought a health insurance policy that covers a lot of illnesses and treatments, and you are happy with your coverage. Then comes a situation when you are in a medical crisis and you make a claim, but then you are shocked to find out that the sum insured paid by the insurer doesn’t cover all of your medical expenses! Stressful, right?
Yes, you did right in buying a health insurance, but were you really careful in selecting the right sum insured? The answer is no. It is very important to choose the right sum insured to avoid such situations and to let your insurer pay the maximum amount in case of a claim. This way you get some peace of mind, and your savings are intact for the future.
Here are Some Factors You must Consider for Choosing Right Sum Insured:
Age and Life Stage:
You can easily obtain a big sum insured at reasonable rates if you are young. However, you should purchase a larger sum insured if you purchase health insurance later in life because your medical costs will rise as you age.
Health Condition:
Suppose you have certain health conditions, such as diabetes, heart problems, blood pressure problems, kidney problems, etc.. In that case, it is best to choose a bigger sum insured, as you may need to utilize your health insurance policy more frequently than others.
Lifestyle Choices:
The sedentary lifestyle, poor eating habits, and other aspects of modern life have increased health risks. You must invest in a bigger sum insured to ensure sufficient protection in the event of an unforeseen circumstance.
Policyholder Income:
When selecting the insured sum, it is important to take the premium cost into account if you have an average income. It is also important to select a premium amount that fits within your budget.
City of Residence:
Your city of residence should also be considered when determining your sum insured. As healthcare facilities are more expensive in metropolitan areas, you must choose a bigger sum insured if you live there.
Number of Family Members:
Health plans like group medical plans and family floater policies need a larger sum secured as they cover more people under one insurance. However, because the risk is shared among numerous individuals, the premium paid for such policies is less than that of other insurance plans.
What is Sum Assured in Insurance?
A second important term often used is Sum Assured. This is a fixed amount you will receive at the end of term insurance. It is often used in Life Insurance policies.
In other words, the sum assured is the amount you initially signed up for, this is the original amount that’s guaranteed to come to you or your beneficiary. The sum assured amount remains unchanged at the end of your policy tenure, it is a pre-determined benefit that the insured will receive.
For example, a life insurance policy may have the Sum Assured limit as ₹15 lakhs in case of death, which means that in case of a such an event, the person’s nominees will be given an assured sum of ₹15 Lakhs.
Difference Between Sum Insured and Sum Assured
Understanding the difference between the Sum Insured and the Sum Assured is crucial when choosing the right insurance plan. While both terms define monetary coverage, they serve different purposes. For clarity, the chart below breaks down the differences:
The sum insured (SI) is the cornerstone of any health insurance policy, determining the financial protection you receive during medical emergencies. Choosing the right sum insured requires careful consideration of factors like your healthcare needs, age, lifestyle, and family medical history.
So, plan wisely and secure a healthier, stress-free future.
FAQs about SI in Health Insurance
What is SI full form in insurance? Explain its meaning.
SI stands for Sum Insured in health insurance. The sum insured is the maximum amount that an insurance company will pay for medical expenses covered under a health insurance policy during a policy period.
How is the sum insured different from the sum assured?
The sum insured is the maximum coverage for medical expenses, while the sum assured is a fixed amount paid out in life insurance policies upon the occurrence of an insured event, like death or critical illness.
How do I determine the right sum insured for my health insurance policy?
To determine the right sum insured for your health insurance, you must consider factors like your age, health condition, family medical history, lifestyle, and the cost of healthcare in your area. Based on this factor you must calculate your sum insured.
Does a higher sum insured mean a higher premium?
Yes, generally, a higher sum insured results in a higher premium because it offers more extensive coverage.
Can I change my sum insured during the policy term?
No, you cannot change your sum insured during the policy term. You can only do the changing during the policy renewal. However, some insurers may allow changes during the policy term under specific conditions.
What happens if my medical expenses exceed the sum insured?
If your medical expenses exceed the sum insured, you have to pay the cost of the expense out of your pocket.
Is the sum insured shared among all family members in a family floater plan?
Yes, in a family floater plan, the sum insured is shared among all insured family members, meaning any member can use the entire sum insured if needed.
Can I have multiple health insurance policies with different sums insured?
Yes, you can have multiple health insurance policies, and you can claim from more than one policy for the same medical event, subject to policy terms and conditions.
What factors should I consider when choosing the sum insured for a senior citizen?
If you are considering choosing a sum insured for a senior citizen, you might consider their age, medical condition, cost of treatment they can need, availability of specialized city, and city of residence.
Does the sum insured reset every year?
Yes, the sum insured typically resets at the beginning of each policy year, providing full coverage for the new policy period.
Can I increase my sum insured at the time of policy renewal?
Yes, you can usually increase your sum insured at the time of policy renewal, subject to the insurer's terms and conditions. You must read your policy document before proceeding.
What is the impact of the sum insured on the claim settlement process?
A higher sum insured can simplify the claim settlement process by ensuring that most or all medical expenses are covered, reducing the need for out-of-pocket payments.
Are there any tax benefits associated with the sum insured in health insurance?
Yes, premiums paid for health insurance policies, including those with higher sums insured, are eligible for tax deductions under Section 80D of the Income Tax Act in India.
How does the sum insured affect the coverage for pre-existing conditions?
The sum insured covers pre-existing conditions after the waiting period specified in the policy. Higher sums insured provide more comprehensive coverage for such conditions once the waiting period is over.
What should I do if I feel my current sum insured is insufficient?
If you feel your current sum insured is insufficient, consider increasing it at the time of policy renewal or purchasing a top-up or super top-up plan to enhance your coverage.