Top Factors to Consider While Choosing a Health Insurance Plan
Mini Balakrishnan
The ever-increasing cost of healthcare, combined with the increased prevalence of diseases, has mandated the need for health insurance. More than half a dozen providers serve a variety of health insurance options in India. Each plan has certain advantages that set it apart from the others. If you find yourself in this position, narrowing down your options for a health insurance policy might take a lot of work.
With so many health insurance options available today, it’s essential to do thorough research before choosing a provider. If you’re looking to compare health insurance plans, we’ve outlined the key steps to guide you through the process.
- 10 Top Factors to Consider While Choosing a Health Insurance Plan
- Identify the Best-Suited Plan for Your Needs
- Determine the Optimal Coverage Amount
10 Top Factors to Consider While Choosing a Health Insurance Plan
Choosing the right health insurance plan can feel overwhelming with so many options available. But when you know what to look for, the process becomes a lot simpler—and smarter. Here are 10 important factors to help you make an informed choice.
Coverage Benefits
In health insurance, “coverage” refers to the medical expenses your policy will pay for. A good plan should cover a wide range of treatments and services, including:
- Hospitalisation (in-patient and day care procedures)
- OPD consultations and diagnostics
- Critical illness coverage
- Maternity and newborn care
Some newer plans also offer mental health support, ambulance charges, teleconsultations, and wellness benefits like free health check-ups or gym discounts.
Sum Insured (Coverage Amount)
The Sum Insured is the maximum amount your insurer will pay in a year. Choosing the right sum insured depends on your age, lifestyle, and medical history.
- A young professional might start with ₹5–10 lakh.
- A family of four may need ₹10–15 lakh to cover everyone.
- Senior citizens often need higher coverage (₹15 lakh or more) due to higher risks and treatment costs.
Choose a sum that comfortably covers treatment in good hospitals in your city.
Premium & Affordability
The premium is the amount you pay annually for the insurance policy. While it’s tempting to choose the cheapest plan, lower premiums often mean less coverage or higher out-of-pocket costs.
Always look for a balance between affordability and coverage. Compare premiums across multiple insurers using online tools and see what you’re getting in return.
Network Hospitals & Cashless Treatment
Network hospitals are healthcare centres partnered with your insurer for cashless treatment. This means you won’t need to pay anything upfront—the insurer settles bills directly with the hospital.
Check if your preferred hospitals are included in the network list. A wider network ensures faster and smoother treatment in emergencies.
Waiting Period for Pre-Existing Diseases
Most plans have a waiting period—a fixed time before they start covering pre-existing diseases (like diabetes, asthma, or hypertension).
This period usually ranges from 2 to 4 years. If you already have medical conditions, look for plans with shorter waiting periods and check what’s considered “pre-existing” in the policy document.
Claim Settlement Ratio & Process
The Claim Settlement Ratio (CSR) indicates the percentage of claims an insurer has successfully settled. A higher CSR (above 90%) usually means better reliability.
Also, research the claim process—is it digital? How quick is the turnaround time? Pick an insurer known for a smooth and transparent claim experience.
Co-Payment & Sub-Limits
Co-payment means you pay a part of the bill, and the insurer pays the rest. For example, a 20% co-pay on a ₹1 lakh bill means you pay ₹20,000.
Sub-limits are caps on specific expenses like room rent or certain surgeries.
These clauses can impact how much you actually end up paying. Always check co-payment terms and sub-limits before finalising a plan.
Add-Ons & Riders
Add-ons (or riders) are optional benefits that enhance your base policy. Common add-ons include:
- Critical illness cover
- OPD and dental care
- Maternity and newborn cover
- Global treatment coverage
Choose add-ons based on your personal health risks, lifestyle, or future plans—don’t pay for what you don’t need.
Exclusions & Limitations
Every health insurance policy comes with exclusions—services or conditions it doesn’t cover. Common ones include:
- Cosmetic or plastic surgery
- Dental and vision care
- Infertility treatments
- Pre-existing diseases (during the waiting period)
Always read the policy document carefully to avoid surprises during claim time.
Customer Support & Reviews
Good customer service makes a big difference—especially when dealing with claims or emergencies. Choose an insurer known for responsiveness and clarity.
Check online reviews, ratings on insurance portals, and feedback from existing policyholders. A few minutes of research can save a lot of trouble later.
Identify the Best-Suited Plan for Your Needs
After you’ve settled on an insurance provider, choosing a policy is the next and most crucial step. You have many options to choose from since there are many insurance companies. Nonetheless, choosing the appropriate coverage is crucial.
So, if you want to compare health insurance policy plans, consider the following:
1. Coverage advantages
Coverage advantages provided by various plans should be your primary priority. Look for plans with special features in addition to the standard ones that cover the basics.
Initially, you should figure out what kind of insurance protections you need. For moms-to-be, it’s important to choose a plan that covers prenatal care and labour and delivery expenses. If your family is complete, you may choose to forego such activities.
Second, investigate any supplementary options that may extend the range of protection. Some features to search for are yearly health checkups, no-claim bonuses, value-added perks, and reimbursement for medical expenses.
Choose a policy with the broadest possible coverage. This would reduce the amount you must pay out of pocket for claims and provide more financial stability.
2. Option for personalisation
Search for plans that let you adjust the specifics of your coverage to suit your needs. The extras included in most health insurance policies make this feasible. You may tailor your coverage to meet your specific requirements using the optional extras.
3. Premium rate
Without a doubt, the premium cost is crucial. Compare the cost of the policy’s premium with the protection it provides. Comparison is the key to understanding. Examine the cost of the premium in light of plans from other insurers providing the same protection level. Check to see whether the premium is reasonable in light of the protection provided.
Choose an insurance policy from a different provider if that’s what it takes to get a lower monthly price for the same level of protection.
4. Sub-limits
Sub-limits on things like room and board, ICU room and board, AYUSH coverage, home health care, etc., are common in health insurance policies. Expenses that aren’t covered by these supplementary maximums must be paid for out of pocket.
If you want to be sure you’re getting the most out of your insurance, get a policy without sub-limits.
5. Co-payment provisions
Co-payment provisions may be included in health insurance policies for several reasons. When you file a claim, you must pay a percentage of the total amount due out of pocket if your plan requires copayments. For instance, for a 10% co-payment, you would be responsible for paying 10% of each claim.
The following are examples of situations when typical co-payment provisions apply:
- If the policyholder is 61 or older when they sign up, they will get a discount.
- If you purchase the coverage in a city with a lower Tier and use it for medical care in a city with a higher Tier, you will pay more for your medical bills.
- On certain diseases and/or therapies
Check for health plans which do not need a deductible or copayment. Choose plans with a reduced co-payment cost even if the condition is obligatory, as with senior citizen policies.
6. Waiting time
The health insurance policy won’t pay for anything during the waiting time. When the deductible has been met, coverage may begin.
In certain cases, members must wait before receiving coverage from their health insurance. Examples of such phrases are:
- First pre-existing condition exclusion period of 30 or 60 days for insurance coverage. Often dubbed a “cooling down phase,” this is when insurance companies stop paying for treatment related to preexisting conditions. Nonetheless, accidental injuries are addressed from day one.
- Many conditions and procedures have different treatment timelines. On average, this lag time is 24 months. However, in certain arrangements, the contract length is flexible.
- There is often a 12- to 48-month waiting time for preexisting conditions. With a new insurance purchase comes a potential waiting time for preexisting ailments and illnesses. Preexisting complications are not covered during this time.
- There is typically a 9-month minimum and a 48-month maximum for maternity leave. Waiting time for OPD charges, bariatric procedures, etc., are covered.
There will always be a need to wait. Nevertheless, you might search for a plan in a short time. This is particularly important if you are expecting a child or have a preexisting ailment that you would want to be covered as soon as possible.
7. Discounts provided
To entice new consumers, health insurance policies provide several discounts. The following are examples of common coupons:
- A discount for purchasing two- or three-year insurance.
- Discount for insuring two or more individuals individually under the insurance.
- Discount for online policy purchase
- Discount for purchasing the payment in one amount as opposed to monthly instalments.
- Discount for the company’s existing clients
- Price discount for living a healthy lifestyle
- Renewal discount if you did not file a claim during the previous policy year.
- Reduction for selecting a voluntary deductible
- A discount for services rendered at a network hospital
Have a look around for deals that could apply to you. Choose the plan that provides the largest reduction to save the most money on your premium.
Your search is over now that you have identified the ideal provider and policy. Not at all. Another consideration is picking an appropriate amount for your sum insured.
Determine the Optimal Coverage Amount
To ensure that your health insurance adequately covers all of your medical costs, you must have a suitable amount of insurance coverage. Having a minimal amount covered is a huge no-no while shopping for health insurance.
Choosing an appropriate amount to insure is easier than you would imagine. So, if you’re planning to compare health insurance plans for your family, keep these factors in mind:
- The total number of policyholders who have health coverage
- Regardless of any preexisting conditions, you and your family are welcome to join.
- The primary expense associated with hospital stays and medical care in general
- An increase in healthcare costs
The appropriate amount of insurance coverage may be determined by analysing factors including income, outlays, current protection, and the number of covered people. There is a straightforward formula you may use to get an estimate of the ideal demand:
The sum covered should equal 50% of your yearly salary plus your hospital bills from the last three years.
Suppose you have a yearly salary of INR 15 lakh and a medical bill of INR 5 lakh for the last three years. Here’s how you’d figure out how much insurance you need:
50 percent of Rs 15 lakh + Rs 5 lakh = Rs 12.5 lakh
Finance a Health Insurance Coverage
Health insurance prices are reasonable. When you compare health insurance in India, consider that many insurance companies let you pay your premium in instalments, often once per month, quarter, or six months. This lowers the cost of health policies.
Moreover, if a large amount insured is beyond your price range, super top-up health insurance is an option. Top-of-the-line supplemental insurance policies may boost protection while keeping costs manageable.
For argument’s sake, let’s imagine that you need INR 15 lakh in insurance but can’t pay the premiums. If this is the case, you may choose between a complete health plan that costs INR 5 or 10 million and a super top-up plan that costs INR 10 or 5 million.
With the super top-up plan, you may increase your total coverage to INR 15 lakh. The total premium would be less expensive compared to purchasing an individual health plan for INR 15 lakh.
Conclusion
Health insurance should give you more than just a card in your wallet—it should give you confidence when life takes an unexpected turn. But for that to happen, it’s important to choose a plan that actually fits your needs. Whether it’s an individual policy, a family floater, or senior citizen coverage, the right plan can make all the difference when it matters most.
We hope this guide has helped you understand what to look for and how to compare your options. Take the time to explore, ask questions, and choose wisely—because peace of mind starts with a policy that works for you and your family.
