Do I really need health insurance?

I’m 40 years old, married with two children. Recently, I was talking to someone my age about health insurance and he mentioned he didn’t have any coverage, terming it to be a “waste of money” every year. My answer to him and anyone else who thinks like him, using broad approximations, is as under:

The table below shows the difference of treatment cost for dialysis/renal failure over one year.

1. A family of four (like mine) residing in Mumbai would be well insured with a Rs 25 lakh insurance cover. This assumes all members being hospitalised once in the year.

See how much health insurance is required for your family by using our calculator.

• A Rs 20-lakh family health insurance cover (also referred to as a family floater) will cost me about Rs 25,000 per annum today. Now, over the next 20 years, considering that if any member of my family (including me) undergoes hospitalization, I could end up paying somewhere between Rs 5 lakh and 30 lakh in healthcare costs. Twenty years of annual health premiums (even where the premium increase with my age every year) will probably amount to less than Rs 10 lakh.

The table below provides calculations on the amount of premium to be paid under different family health plans.

Being hospitalised even once over the next 20 years makes health insurance worth it. The following graphic displays the average health insurance inflation across major cities in India.

Source: BigDecisions.com

Do you really think that no one in the family would ever need hospitalization over a 20-year period ? Well, I certainly hope to be that lucky.