Health Insurance for Family of 5: How Much Sum Insured Is Enough?

How Much Health Insurance Does a Family of 5 Need?

The table below provides indicative sum insured ranges for a family of 5 based on different family compositions and locations. These are not fixed amounts; you must assess your family's healthcare needs and expected medical bills before selecting the sum insured.

Family Structure & Location	Recommended Sum Insured	Why It Fits?
2 adults + 3 kids	₹20–25 lakh	Provides a large shared pool to cover a major hospitalisation or multiple medical claims in the same year
2 adults + 3 young adults; living in a metro city	₹30–50 lakh	High private hospitals costs with expensive medical and surgery costs and room rents
2 adults + 3 young adults; living in a Tier-2 or 3 city	₹20–30 lakh	Lower healthcare costs but your health insurance should be able to handle multiple claims and future medical expenses
Family members with PEDs	₹25–50 lakh	Pre-existing diseases like diabetes, high BP or heart diseases increases the likelihood of hospitalisation and increase long-term healthcare costs
2 adults + children + parents	₹40–50 lakh+ or ₹30 lakh+ family cover with a separate cover for parents	- Older members have higher healthcare needs and can require frequent hospitalisations - Separate health insurance for parents ensures that their hospital bills do not affect the entire family's shared sum insured

Note: The amounts mentioned are indicative of a practical range to consider. Assess your individual family's healthcare needs before opting for a sum insured.

Why Does a Family of 5 Need More Coverage?

Since family floater health insurance works on a shared single sum insured, a major hospitalisation for one member can reduce the coverage for other insured members.

For example, if you have a family health plan of ₹15 lakh, all five insured members have a total of ₹15 lakh to use during a policy year. If one member needs a heart surgery and the eligible hospital bill costs ₹12 lakh, only a ₹3 lakh sum insured will be left for everyone for the remaining year.

With more members included in the same health insurance policy, families should select a sum insured sufficient to cover potential medical expenses, multiple hospitalisations and future medical costs in the same year.

Factors to Consider Before Selecting Your Family Sum Insured

Consider the guide below to select an adequate sum insured for health insurance plans for family:

Age of the Members & Family Composition: Older members usually have higher healthcare needs. A family with kids or young members will need a different health insurance cover than one with older members.
Pre-existing Diseases: Having PEDs can increase the likelihood of claims and may also involve waiting periods. It also increases the premium for a family health insurance policy.
City and Hospital Costs: Consider the cost of medical procedures in your city. You may require higher coverage for treatment at private hospitals with advanced medical facilities.
Medical Inflation: Healthcare costs can increase rapidly over time. Your family health plan's sum insured should be enough to cover not only today's hospital bills but also future medical costs.

What Should You Consider Besides Sum Insured for a Family of 5?

There are many factors, other than the sum insured, that you must consider when buying a health insurance plan for your family. These include the following:

Room Rent Limits: Choose a policy with no room rent limit to avoid proportionate deductions on eligible medical expenses.
Disease-specific Restrictions: You must know whether your health insurance policy has sub-limits on specific illnesses or treatments beforehand, otherwise it will add a financial burden at the last moment.
Restoration of the Sum Insured: For a family of 5, where multiple members may need treatment in the same year, it is recommended to opt for a plan with unlimited restoration benefits to get continued coverage.
Co-payments: Choose a plan with no or low co-payments to avoid paying a higher percentage of eligible medical expenses from your own pockets for every claim.
Network hospitals: Check whether your preferred and nearby hospitals are included in the insurer's network list, as this can help you access cashless treatments more easily.

Health Insurance for Family of 5: FAQs

Q1. Is ₹20 lakh enough for a family of 5?

Ans: A ₹20 lakh health insurance cover can be a reasonable starting point for a family of 5 in which all the members are young and healthy; however, it may not be sufficient for every family. You must opt for a higher coverage if your family has older members or people with pre-existing health conditions or if your city has high medical costs.
Q2. Should I include my parents in my family floater policy?

Ans: While you can include parents in a family floater health insurance policy, it is often a better idea to include them in a separate policy. This is because parents may have higher healthcare needs and can use up a significant portion of the family’s shared sum insured. Buying a separate health insurance policy for parents is advised, especially if they are older and have existing health conditions.
Q3. If I have a family of 5, can I use the sum insured for multiple members in the same year?

Ans: Yes. Multiple members can claim the same family floater in the same year, subject to the remaining sum insured and policy terms.
Q4. What sum insured is best for a family of 5 with children?

Ans: If your family of 5 includes young children, a sum insured of ₹20-25 lakh can be a good starting range to consider. Increase your coverage depending on your family’s healthcare needs or if treatment costs in your city are high.

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Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in

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*All the health insurance plans cover hospitalization expenses including COVID-19 treatment cover up to the specified limits. You can also buy specific COVID-19 health insurance policies such as Corona Kavach Policy and Corona Rakshak policy.

**All savings and online discounts are provided by insurers as per IRDAI approved insurance plans. #Tax Benefits are subject to changes in tax laws.

*₹1748/month is the starting price for a 1 crore health insurance for an 18-year-old male, with no pre-existing diseases. Discount on renewal premium is subject to the number of wellness points earned in the health insurance policy. For more details about the plans, please read the sale brochure carefully to get upto 100% discount on renewal premium.

*₹400/month is the starting price for ₹ 5 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

*₹541/month is the starting price for ₹ 10 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

*₹762/month is the starting price for ₹ 1 Crore Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

*₹243/month(₹ 8/day) is the starting price for a 5 lakh health insurance for a 20-year-old male, non-smoker, living in Bengaluru with no pre-existing diseases

*₹2020/month is the starting price for ₹ 1 Cr Health insurance for a 50 year old male & 50 years old female, living in Bangalore with no pre-existing diseases rounded off to nearest 10.

*₹390/month (₹13 per day) is starting price for 1 cr. Health insurance for 25 years old male, with pre-existing diseases, residing from tier 1 city rounded off to the nearest 10.

*No medical tests are required unless requested by the insurer’s underwriter. In-case of pre-existing diseases relevant medical proof would be required as per the terms and condition of the policy opted.

*The values taken for effective cost calculation are indicative values and may change as per the selected plan.

*Coverage upto double the amount of Sum Insured is available on certain covers for a minimum plan of Rs. 5 Lakh on the first claim only to an individual of upto 45 years of age with no pre-existing diseases. The benefit is available with or without extra cost depending on the plan chosen.

*Coverage of pre-existing diseases is provided by insurer as per their underwriting policy.

*The scope of coverage may vary from plan to plan.

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