How Good is a 10 Lakh Health Insurance?

Health insurance isn’t a luxury—it’s your financial lifeline when things go south. With medical costs skyrocketing and lifestyle diseases becoming more common, choosing a suitable health insurance plan with the right coverage is more important than ever. For some, ₹10 lakh might be plenty, while others might need ₹20 lakh or more to be comprehensively covered during medical emergencies.

So, you might think, why not get higher coverage and just be done with it? 

Here’s why -

1. Going overboard with coverage means higher premiums, which could strain your budget and make it harder to keep your policy in the long run. 
2. On the flip side, if your coverage falls short, you might pay a hefty amount out of pocket during a medical emergency.

The ideal coverage amount isn’t the same for everyone—it depends on several factors, like the location of the insured individual, the family’s health history, the individual's age, etc. 

Considering all of these, let’s break down these factors and see how good a ₹ {10 lakh health insurance plan is and what coverage will suit you best.

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Factors that affect the adequacy of your 10 lakh coverage

The utility of a given sum insured is highly relative and dependent on a slew of factors. Let’s take a look at what these factors are:

• Age: Age is an important factor in determining the right sum insured for you. When you're young and healthy, a lower sum insured might seem sufficient, especially if you have minimal health risks. However, as you age, the likelihood of needing medical care increases, and it may become harder to enhance your coverage. Insurers consider factors like higher claim probabilities, which can affect your ability to upgrade your plan or may increase premiums significantly. That’s why it can be a good idea to choose a sum insured that accounts for both your current health and potential future needs.
• Pre-existing conditions: Pre-existing diseases are health conditions you’ve been diagnosed with within the last 36 months before applying for a policy. These could range from chronic diseases like diabetes and hypertension to severe illnesses like cancer and even surgeries or random hospitalizations. 
  
  Insurers apply a component called ‘loading charges’ to your premium if you have pre-existing diseases, lifestyle habits like smoking or drinking, or an unusual Body Mass Index. This hikes up your premiums in the range of 10%-40%, but it can be even more depending on the severity of the condition. Moreover, if the condition of the PED is too severe or there are too many PEDs, the insurer may not extend a policy at all or include the PEDs under permanent exclusions.
  
  Naturally, the number of pre-existing diseases may increase with age, which makes your premiums higher due to the addition of loading charges. With this in mind, it is important to apply for health insurance early and ensure that your sum insured is sufficient enough to deal with the medical costs of treating these PEDs.
• Location: The cost of treatment in Tier-1 cities is higher than that of treatment in Tier-2 or Tier-3 cities. A surgery that costs ₹2 lakhs in a small town could easily become ₹3-3.5 lakhs in a metro city. It’s important to keep this in mind while opting for a health insurance plan, as a higher cost of treatments would require you to get a higher amount of coverage. 
• Medical Inflation: India’s medical inflation rate, ranging from 10-14% per year, is one of the highest in Asia, influencing the cost of healthcare over time. For example, a treatment costing ₹5 lakh in 2025 could increase significantly in the future. To stay well-prepared, you can explore options like super top-ups or add-ons to extend your coverage or take advantage of benefits like restoration and no-claim bonuses to maximize your plan’s value.
• Number of members covered: In a family floater plan, the sum insured is shared among all members. So, if a family of four has ₹10 lakh cover, multiple hospitalizations in a year could drain the coverage quickly. Opting for a higher floater sum or individual plans can help ensure better protection.

How to tap into the benefits of a 10 lakh coverage and/or boost it?

If you already have a ₹10 lakh cover but want to strengthen it further, don’t stress! You can go about it in two ways. First, you can leverage in-built policy features to enhance your policy, or, you can elevate it with a few smart add-ons or an additional cover. Let’s explore how:

Features:

• Restoration Benefit: This feature restores your sum insured if you make a claim and your base cover gets exhausted during the policy year. For instance, if you use up ₹5 lakhs for a major surgery, the insurer "restores" the sum insured amount, bringing it back to ₹10 lakhs, so you have access to the entire sum insured once again and are covered for future claims within the same year. It’s especially helpful in family floater plans, where multiple members might need treatment in one year. 
  
  For example, you claim ₹10 lakhs for cancer treatment, and a month later, someone in your family needs surgery costing ₹3 lakhs. With restoration, your sum insured bounces back to ₹10 lakh after you make the first claim, so you don’t pay out of pocket. However, note that the restoration feature comes with certain terms and conditions. As such, you should always go for a policy with unlimited restoration per year upon partial exhaustion for the same or different illnesses.
• No-claim or Renewal Bonuses: If you don’t make a claim in a policy year, insurers reward you with a bonus- usually by increasing your sum insured to a certain percentage of your base cover, at no extra cost. This can add up over time and significantly boost your coverage. Even if you do make a claim, some insurers offer a loyalty or renewal bonus which increases your sum insured significantly.

Additional Benefits/Cover:

• Super Top-Up Plans: These plans kick in once your base sum insured is exhausted, covering costs beyond your initial limit. They have low premiums and are a great way to extend your protection without breaking the bank. Generally, super top-ups and the base policy have to be from the same insurer so that they can be used for the same claim. 
  
  Consider this as an example: You have a ₹10 lakh base plan and a ₹20 lakh super top-up with a ₹10 lakh deductible. If your hospital bill is ₹18 lakh, the base policy covers ₹10 lakhs, and the super top-up covers the remaining ₹8 lakhs as the base plan covers the ₹10lakh deductible threshold.
• High-Value Add-ons: Opting for add-ons is a good idea when your base sum insured isn’t that high. Look for add-ons such as consumables cover, free annual health check-ups, and other add-ons that reduce your out-of-pocket expenses.

Should You Opt for a 10 lakh Health Insurance Plan?

Let’s use some examples to understand this:

• Use Case 1: Rahul is a healthy 20-year-old with no pre-existing diseases. Should he go for a 10 lakh health insurance plan?
  
  Ditto’s Recommendation: Yes, a 10 lakh health insurance plan is a good idea for Rahul because he does not have any PEDs and is young. He can always increase his cover later or choose alternative options to boost his cover.   
• Use Case 2: Mr. Malhotra wants to purchase a health insurance policy for himself, his wife, and their two kids and none of them have any pre-existing diseases. Should he go for a 10 lakh health insurance plan?
  
  Ditto’s Recommendation: While a 10 lakh plan definitely provides some amount of coverage, we’d suggest he take a slightly higher cover as four people will share the sum insured. Despite not having any PEDs, if multiple people face hospitalizations in the same year, the coverage could run out. Also, it is essential to make sure that restoration is available in this plan.
• Use Case 3: Sinthia is a 50-year-old with diabetes living in Mumbai. Should she go for a 10 lakh health insurance plan?
  
  Ditto’s Recommendations: A 10 lakh health insurance plan is a good start, but as an older individual with a pre-existing disease living in a Tier-1 city, it may fall short if she faces multiple hospitalizations in a year or requires prolonged treatment.

Top 5 10 lakh health insurance plans

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Conclusion

A ₹10 lakh health insurance plan can provide significant financial support during medical emergencies, covering a wide range of healthcare expenses. By understanding what’s included in the policy and exploring ways to enhance it with add-ons or top-ups, you can make the most of your health insurance and enjoy peace of mind knowing you’re protected.