Part 1 argued that a bigger number on your policy quietly kills your incentive to question the bill. Part 2 asks the question that number was supposed to answer in the first place: enough for what?
- The industry sells sum insured the way phone brands sell megapixels. A bigger number that’s easy to compare, hard to actually evaluate, and mostly disconnected from whether it solves your problem.
- Your real ceiling isn’t a round number, it’s your city’s cost base. A cardiac bypass in a metro tertiary hospital runs a fraction of what a ₹1 crore policy implies is “needed.” Buying cover for a claim scenario you’ll statistically never hit isn’t safety - it’s premium spent insuring against fiction.
- Insurers push the big numbers because it’s a cheap way to compete. A “1 crore cover” headline is easier to market than “no room-rent sub-limit”. Even though the second one is what actually determines what you get paid when you claim.
- Sub-limits, co-pay clauses, and disease-wise caps are where the real gap lives, not in the topline number.
- A ₹10 lakh policy with clean terms can pay out more than a ₹50 lakh policy riddled with restrictions: the headline number tells you nothing about this.
- Over-insuring has a cost most people don’t count: the premium difference between “adequate” and “oversized” cover is capital that stops compounding for you and starts compounding for the insurer instead. That’s not prudence, that’s a silent wealth transfer.
- The right question was never “how big”. It’s a function of three things: your city’s actual treatment cost base, what your employer cover already handles, and your family’s real risk profile (age, history). Everything past that is marketing, not protection.
- The fix: stop shopping for the sum insured. Start reading the exclusions, the sub-limits, and the co-pay schedule. That’s the document that actually decides what you get paid, not the number on the cover page.
2/7 - Rethinking Health Insurance
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