Medical Inflation: Why a ₹5 Lakh Policy is Useless
Inflation in healthcare is 14%, double the general inflation. Your ₹5 Lakh corporate cover will vanish in 3 days. Here is the math of medical poverty.
Key Takeaways
- Medical Inflation in India is ~14% per year (Highest in Asia).
- A surgery costing ₹5 Lakhs today will cost ₹20 Lakhs in 10 years.
- Corporate Insurance is a 'Umbrella with holes'—you lose it when you lose your job.
- Solution: Buy a ₹1 Crore Super Top-up policy for cheap.
The "Corporate Cover" Trap
Meet Arjun. He works at an MNC. He has a ₹5 Lakh Health Insurance policy provided by his company. He thinks: "Mai safe hu. Why waste money buying personal insurance?"
Arjun is driving a car at 100kmph without a seatbelt.
Current Medical Inflation in India is 14%. This means medical costs double every 5-6 years.
The 10-Year View
Let's assume you need a major Heart Surgery in 2035.
- •Cost Today (2025): ₹5,00,000
- •Cost in 2030 (5 years): ₹10,00,000
- •Cost in 2035 (10 years): ₹20,00,000
Your puny ₹5 Lakh policy will cover 25% of the bill. Where will the remaining ₹15 Lakhs come from? Your Savings. Your Investments. Your Kids' Education Fund.
Chapter 1: Why is Medical Inflation so high?
General inflation (milk, bread) is 6%. Why is Medical Inflation 14%?
- •Technology: New robotic surgeries are better but expensive.
- •Dollar Rate: Most high-end medical equipment is imported. As ₹ weakens, tests get costlier.
- •Real Estate: Hospitals generally sit on prime land. High rent = High room charges.
Chapter 2: The "Corporate" Lie
Relying on company insurance is dangerous for 3 reasons:
- •Job Loss: If you get fired (or resign), your cover vanishes INSTANTLY.
- •Retirement: When you retire at 60, getting a new policy is almost impossible (and wildly expensive) because you will have "Pre-existing diseases" (BP, Sugar).
- •Co-Pay Clauses: Company policies often have "Co-pay" where YOU have to pay 20-30% of the bill.
Chapter 3: The Solution (Super Top-up)
You don't need to buy a growing Base Policy (expensive). You need a Base + Super Top-up Combo.
- •Step 1: Buy a Base Policy of ₹5 Lakhs or ₹10 Lakhs. (Premium: High)
- •Step 2: Buy a Super Top-up of ₹90 Lakhs. (Premium: Dirt Cheap)
Why is Top-up cheap? Because it has a "Deductible". It only kicks in after your Base Policy is exhausted. Since the probability of a claim crossing ₹10 Lakhs is low, the insurers charge very less.
The Math of Coverage:
- •Base: ₹10 Lakhs
- •Super Top-up: ₹90 Lakhs
- •Total Cover: ₹1 Crore
- •Total Cost: Approx ₹15k - ₹20k per year (for a 30-year-old).
Conclusion
A single hospital bill can wipe out 10 years of savings. We call this "Medical Poverty". Don't let a heart attack give you a financial heart attack. Upgrade to ₹50L+ cover today.
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Written by Amodh Shetty
Amodh is a personal finance educator and the founder of KnowYourFinance. With a deep understanding of Indian taxation and investment products, he simplifies complex financial concepts to help young Indians build wealth safely.
Editorial Disclosure: The author holds investments in broad-market index funds and SGBs. This article is strictly for educational purposes and does not constitute professional investment advice. KnowYourFinance maintains complete editorial independence.
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