Will a Health Insurance company top up your Sum Insured annually as a BONUS?

There are many exciting features added to the new generation of health insurance. The competition among health insurance companies is catching up, and many are inventing new riders to stay relevant. We will discuss one such rider — SUPREME BONUS today.

If you have already taken a health insurance policy, you might be aware of these basic details.

1. The total Sum Insured.
2. The premiums you have to pay.
3. Insured Person(s).
4. The list of hospitals that support cashless treatments.
5. The contact number of the agent/TPA for claim-related matters.

In case you have not taken a health insurance policy before, let me explain the above points in a one-liner.

Sum Insured: is the maximum amount you can claim per year. If your policy has a SI of 10 lakhs, then the hospitalization bills upto 10 lakhs will get covered and anything above that has to be borne by the Insured.

Premium: is the amount you have to pay annually to retain the contract. If you stop paying premiums then the health insurance policy will no longer be valid.

Insured Person(s): The list of people who are covered in your policy. Chances are that the policy you took could be a family floater one and maybe 4 to 6 people could be covered including you.

Cashless Treatments: Only selected hospitals accept cashless treatments. Considering the peace of mind, it is highly advised to select insurance policies that accept cashless claims for the hospital you prefer to go to.

Agent Contact: The person who mediated between you and the insurance company is the agent. When a claim arises, it would be much better if the agent did the heavy lifting and paperwork for you. Always take insurance from credible insurance agents for continued peace of mind.

The usual premium repayment period will be 1 year, hence I am not mentioning that explicitly.

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For example — refer to the image below.

1. The Sum Insured = 10 Lac
2. The premiums = 23828 per year
3. Insured Persons = 4 nos.
4. Cashless hospitals — not updated
5. Agent contact — not updated

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Take a look at the sum insured = 10 Lac, to me it appears decent for a family of four today. The eldest is 30 years old and the youngest is 1 year old baby. Under normal circumstances, the hospitalization bill should not exceed 10 lakhs a year. But we may not be able to say what will be the situation after 5 years or 10 years.

There are 2 disadvantages

1. Cost of Inflation
2. Age of Insured

Medical and healthcare inflation is through the roof, it is appreciating much faster than the central bank’s 6% upper band target per year. Secondly, as the age of the Insured goes up, the chances of falling sick either due to lifestyle diseases or stress could go up.

This double trouble will make 10 lakhs look like peanuts after 5 years or 10 years.

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The safest option to cover this problem is to opt for a supreme bonus rider. It comes at a nominal cost on top of the premium amount. Let us analyze the benefits and then try to work out if it’s a deal or not.

As per the scheme, you will get the sum insured amount topped up every year from the 2nd year till the 8th year. So your sum insured will look like this

1. Year 1 — 10 Lac
2. Year 2 — 20 Lac
3. Year 3 — 30 Lac
4. Year 4 — 40 Lac
5. Year 5 — 50 Lac
6. Year 6 — 60 Lac
7. Year 7 — 70 Lac
8. Year 8 — 80 Lac

All this comes at a small extra cost by opting in for the supreme bonus rider. I am not sure how long this feature will be available, but for the people who have opted and locked in their health insurance — it is a super deal.

Take a look at year 5, your sum insured will be at 50,00,000 which is 5 times your original SI. The rider cost will be approximately Rs500 per year. Practically there is no way you could explain this. You might be even willing to pay 5 times more premium after 5 years to get a 50 Lac coverage, but trust me it is not required.

Even if you have a corporate medical policy right now, it is still advised to log a personal health insurance policy because the moment you leave the corporate job you will be uninsured. And the older you become, the costlier the insurance premiums.

The next time you choose a health insurance policy make sure you have opted for this scheme. I have not seen anything more value for money than this in insurance. I personally do not know how the insurer can manage this, but as a customer enjoy it as much as it lasts.

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Balachandran Viswaram | www.viswaram.com | +917736010203