What is Health Insurance?
Health insurance is a financial safety net that helps you cover medical expenses when you need them the most. Simply put, it’s an agreement between you (the policyholder) and the insurance company, where they take care of your healthcare costs up to a predefined limit.
A good health insurance plan ensures you and your family are financially protected against unexpected medical emergencies—be it an illness, an accident, or a critical diagnosis. Depending on the policy, it can cover hospitalization bills, doctor consultations, pre-and post-hospitalization expenses, medical tests, and even surgeries.
Most plans also offer cashless treatment at network hospitals, meaning you don’t have to worry about making upfront payments—the insurer settles the bills directly. If you opt for a reimbursement plan, you can get the expenses refunded after submitting your medical bills.
Types of Health Insurance Plans
Health insurance comes in different types, catering to different needs. Whether you’re looking for individual coverage, family protection, or a plan that covers critical illnesses, here’s a breakdown of the most common types of health insurance policies:
1. Individual Health Insurance
This plan covers a single person and takes care of medical expenses, including:
- Hospitalization costs, such as room rent, doctor’s fees, and medicines
- Pre and post-hospitalization expenses, including tests and follow-ups
- Surgical procedures, including major and minor treatments
- Daycare procedures that don’t require 24-hour hospitalization, like cataract surgery and dialysis
It’s ideal for individuals who want complete coverage without sharing the sum insured with family members.
2. Family Floater Health Insurance
A family floater plan provides coverage for multiple family members under one policy with a shared sum insured. This typically includes:
- Self, spouse, and children (some plans also cover parents)
- A single premium for the entire family
- Coverage for hospitalization, surgeries, and treatments for any insured member
Since the sum insured is shared among all members, it’s a cost-effective option for families with younger, healthier individuals.
3. Senior Citizen Health Insurance
Designed specifically for individuals above 60 years, this plan offers:
- Coverage for age-related illnesses such as arthritis, osteoporosis, and heart disease
- Higher sum insured options to meet medical expenses in later years
- Coverage for pre-existing conditions after a waiting period
- Home healthcare benefits for treatments that don’t require hospitalization
- Preventive health check-ups for early disease detection
These plans often come with higher premiums due to increased health risks associated with aging.
4. Critical Illness Insurance
This plan provides a lump sum payout upon diagnosis of a critical illness. Some of the covered conditions include:
- Cancer (advanced stages)
- Heart attack and stroke
- Kidney failure
- Liver disease
- Paralysis
- Organ transplant
The lump sum payout helps cover expensive medical treatments, loss of income, and rehabilitation costs. Unlike standard health insurance, hospitalization is not required to claim this benefit.
5. Group Health Insurance
Employers provide this type of health insurance as part of employee benefits. It generally includes:
- Basic medical coverage for hospitalization and treatments
- Lower premiums due to group discounts
- Immediate coverage for pre-existing diseases
- Add-on benefits such as maternity coverage and accidental disability coverage
The downside is that the coverage is lost if the employee leaves the company, unless they convert it into an individual policy.
6. Maternity Health Insurance
This plan is specifically designed for expectant mothers and includes:
- Prenatal expenses, such as doctor consultations and medical tests
- Hospitalization costs for both normal and C-section deliveries
- Postnatal care for the mother and newborn
- Newborn baby cover for the first 90 days
Maternity coverage usually comes with a waiting period of 2–4 years, so it’s best to buy it in advance while planning a family.
7. Disease-Specific Health Insurance
This plan provides coverage for specific long-term conditions, such as:
- Diabetes, including insulin therapy, check-ups, and hospitalization
- Heart disease, covering cardiac treatments and surgeries
- Cancer, with benefits for chemotherapy, radiation, and targeted therapy
- Liver disease or kidney failure, covering transplants and dialysis
These plans ensure that individuals with chronic conditions receive specialized treatment without financial strain.
8. OPD Health Insurance
Unlike standard health insurance that primarily covers hospitalization, OPD (Outpatient Department) health insurance covers:
- Doctor consultations for routine check-ups and minor ailments
- Diagnostic tests such as blood tests, MRIs, and X-rays
- Pharmacy expenses for prescribed medicines
- Minor procedures like stitches, dressing wounds, and small surgeries
This plan is particularly beneficial for individuals who frequently visit doctors for minor medical concerns.
Health Insurance Coverage at a Glance
| Coverage Feature | Availability & Details |
| Sum Insured Options | ₹3 lakh – ₹2 crore (Varies by policy and insurer) |
| Hospitalization Coverage | Covers room rent, ICU, doctor’s fees, and medical expenses |
| Pre & Post-Hospitalization | Covered (Typically 30 days before and 60–120 days after hospitalization) |
| Ambulance Services | Covered (Limit varies between ₹2,500 – ₹15,000 per hospitalization) |
| Maternity Benefits | Available in selected plans (Waiting period of 2–5 years) |
| Daycare Procedures | Covers minor surgeries such as cataract removal, dialysis, chemotherapy |
| Alternative Treatments (AYUSH) | Covers Ayurveda, Yoga, Unani, Siddha, and Homeopathy treatments |
| No-Claim Bonus (NCB) | Increases sum insured by 10–60% for every claim-free year |
| Coverage for Pre-Existing Conditions | Covered after a waiting period of 2–5 years, depending on the policy |
| Annual Health Check-ups | Available in select plans for preventive healthcare |
| Tax Savings on Premiums | Eligible for deductions up to ₹1,00,000 per financial year under Section 80D |
Top 15 Health Insurance Providers in India
| Insurance Provider | Coverage (₹ Lakhs) | Network Hospitals | Starting Price (₹/Year) | Age Eligibility |
| Care Health Insurance | Up to 600 | 11,400+ | ₹6,500 onwards | 91 days – 65 years |
| Niva Bupa Health Insurance | Up to 100 | 10,000+ | ₹7,000 onwards | 91 days – No upper limit |
| HDFC ERGO Health Insurance | Up to 75 | 12,000+ | ₹4,500 onwards | 91 days – 65 years |
| ICICI Lombard Health Insurance | Up to 50 | 7,500+ | ₹5,500 onwards | 91 days – No upper limit |
| Aditya Birla Health Insurance | Up to 200 | 11,000+ | ₹5,500 onwards | 91 days – 65 years |
| ManipalCigna Health Insurance | Up to 300 | 8,751+ | ₹6,000 onwards | 91 days – 65 years |
| Tata AIG Health Insurance | Up to 20 | 10,000+ | ₹4,800 onwards | 91 days – 65 years |
| SBI Health Insurance | Up to 30 | 6,000+ | ₹4,000 onwards | 91 days – 65 years |
| Bajaj Allianz Health Insurance | Up to 50 | 11,000+ | ₹5,000 onwards | 3 months – 65 years |
| Acko General Insurance | Up to 50 | 14,300+ | ₹5,000 onwards | 18 years – 65 years |
| Future Generali Health Insurance | Up to 50 | 8,430+ | ₹4,500 onwards | 91 days – 70 years |
| United India Health Insurance | Up to 25 | 6,500+ | ₹3,000 onwards | 3 months – 65 years |
| Kotak Mahindra Health Insurance | Up to 25 | 7,700+ | ₹3,800 onwards | 91 days – 65 years |
| Reliance Health Insurance | Up to 50 | 10,000+ | ₹5,500 onwards | 91 days – 65 years |
Please note that the coverage amounts, network hospitals, starting prices, and age eligibility criteria are subject to change based on the insurer’s policies and specific plans. It’s advisable to visit the official websites of these insurance providers or consult with their representatives for the most accurate and up-to-date information.
What is Not Covered in a Health Insurance Plan?
While health insurance provides financial protection for various medical expenses, it is equally important to know what it does not cover. Every policy has certain exclusions, and understanding them can help avoid unexpected claim rejections. Here are some common exclusions found in most health insurance plans:
Initial Waiting Period
Most health insurance policies have an initial waiting period of 30 days from the start date of the policy. During this period, no claims are covered except for emergency hospitalization due to an accident. This is a safeguard used by insurers to prevent fraudulent claims from individuals who may have already planned a medical procedure before purchasing the policy.
Pre-Existing Diseases
Health insurance does not cover pre-existing conditions immediately. A waiting period of 2 to 4 years is applicable before expenses related to conditions like diabetes, hypertension, and thyroid disorders become eligible for claims. Some insurers offer an option to reduce this waiting period by paying a higher premium.
Critical Illnesses Waiting Period
Critical illness insurance, which provides a lump sum payout upon diagnosis of severe diseases like cancer or stroke, usually has a 90-day waiting period before claims can be made. Additionally, most policies require the insured to survive for at least 30 days after diagnosis for the benefit to be payable.
Injuries Due to External Factors
Medical expenses arising from injuries caused by war, terrorism, riots, or nuclear radiation exposure are not covered. Similarly, injuries sustained during military operations or civil conflicts are also excluded.
Self-Inflicted Injuries
Claims related to suicide attempts, self-harm, or injuries caused by substance abuse and alcohol-related incidents are not covered under health insurance. These exclusions ensure that policies are used for genuine medical emergencies rather than self-inflicted harm.
Terminal Illnesses
Certain terminal illnesses, particularly those in advanced stages with minimal chance of recovery, may not be covered. While critical illness insurance may provide payouts for some such conditions, it is essential to check the policy details for any exclusions.
Cosmetic & Elective Procedures
Health insurance does not cover plastic surgery, botox, liposuction, or any other cosmetic enhancements unless they are required due to an accident or medical necessity. Hair transplants, fertility treatments, and hormone replacement therapy are also excluded. Additionally, LASIK eye surgery and dental procedures are generally not covered unless they are the result of an accident.
Non-Accidental Dental Treatments
Regular dental care, such as cleanings, braces, and cosmetic dentistry, is not covered under health insurance. However, if a dental procedure is required due to an accident or facial injury, some policies may offer limited coverage.
Bed Rest & Rehabilitation
Health insurance does not cover long-term hospitalization for rehabilitation, physiotherapy, or nursing care, unless it is required as part of post-hospitalization treatment for a covered illness or injury. Expenses related to prolonged bed rest without active treatment are also excluded.
Diagnostic Tests Without Treatment
Standalone diagnostic tests, such as blood tests, MRIs, or scans, are not covered unless they are linked to the diagnosis or treatment of a medical condition. However, some policies offer preventive health check-ups as part of their coverage.
Adventure Sports Injuries
If you sustain injuries while engaging in high-risk activities like skydiving, scuba diving, bungee jumping, mountaineering, or motorsports, your health insurance will not cover the medical costs. Some insurers provide add-on riders for adventure sports coverage, but they must be purchased separately.
Note: Every insurance policy has specific exclusions, and understanding them helps policyholders make informed decisions. Before purchasing a plan, it is essential to read the policy document carefully, ask the insurer about specific exclusions, and consider add-on covers if necessary.
Top Reasons Why You Should Buy Health Insurance
Investing in a health insurance plan is not just about securing coverage for medical expenses; it’s about protecting yourself and your family from financial strain during unforeseen medical crises. Here’s why health insurance is essential:
- Rising Medical Costs
Healthcare expenses have been increasing significantly over the years. From routine doctor visits to major surgeries, medical bills can quickly add up, putting a strain on your savings. Costs for hospitalization, treatments, diagnostic tests, and post-hospitalization care are rising due to inflation and advancements in medical technology.
Without health insurance, a single hospital stay or critical treatment can drain your finances, forcing you to compromise on quality care or even take loans. A comprehensive health insurance policy ensures that you can afford the best medical treatment without worrying about the costs.
- Access to Quality Healthcare
A robust health insurance plan provides access to the best hospitals and doctors without the stress of arranging funds at the last minute. Many insurers offer a cashless hospitalization facility, allowing you to receive treatment at network hospitals without paying anything upfront.
The insurance company directly settles the bill with the hospital, making it easier for you to focus on getting the best possible treatment rather than arranging for finances during a medical emergency. This means better healthcare services, quicker admission processes, and stress-free medical management.
- Covers Unexpected Medical Emergencies
Medical emergencies can strike at any time, and they don’t come with a warning. A sudden illness, a major accident, or an unexpected surgery can disrupt your financial stability. With a health insurance plan, you are financially prepared for such emergencies, ensuring that your savings remain intact while the insurance covers your medical expenses.
Additionally, health insurance provides coverage for ambulance charges, ICU expenses, and post-hospitalization treatments, ensuring comprehensive protection in case of unexpected health issues.
- Get Tax Benefits
Health insurance not only provides financial security but also helps you save on taxes. Under Section 80D of the Income Tax Act, you can claim tax deductions on the premiums paid for yourself, your spouse, children, and parents. The tax benefits include:
- Up to ₹25,000 per year for premiums paid for self, spouse, and children (if below 60 years).
- An additional ₹50,000 if you are paying for parents who are senior citizens (aged 60 and above).
- A total deduction of up to ₹1,00,000 per year if both you and your parents are senior citizens.
By purchasing health insurance, you not only safeguard your health but also reduce your taxable income, making it a smart financial decision.
- Peace of Mind for You & Your Family
Medical emergencies can be overwhelming, not just physically but also emotionally and financially. Having health insurance gives you peace of mind, knowing that you and your family are covered against unexpected medical expenses. It eliminates the stress of arranging large sums of money at short notice and allows you to focus on recovery and well-being instead of worrying about hospital bills.
Can’t Figure Which Plan Is Right For You? Tips To Get You Sorted!
Finding the perfect health insurance plan can feel overwhelming, given the variety of options available. However, focusing on key factors can make the decision easier and ensure you get a policy that meets your healthcare and financial needs. Here’s what you should consider:
- Coverage & Sum Insured
The primary purpose of health insurance is to provide financial protection against medical expenses. Choose a plan that offers comprehensive coverage.
Additionally, ensure that the sum insured is adequate to cover the rising costs of medical treatment. With healthcare inflation in India, a policy with at least ₹10–20 lakh coverage is advisable, especially for families in metro cities.
- Policy Type
Health insurance comes in different types, each catering to specific needs.
Selecting the right type of plan ensures you have adequate coverage without overpaying for unnecessary features.
- Waiting Period
Most health insurance policies come with a waiting period before they cover pre-existing conditions or specific treatments. This can range from 2 to 4 years for illnesses like diabetes, hypertension, or heart disease.
Additionally, maternity benefits usually have a waiting period of 2–5 years. If you have existing health conditions, opt for a plan with a shorter waiting period to access benefits sooner.
- Co-payment & Sub-limits
Some policies require policyholders to share a portion of the medical bill (co-payment), particularly for senior citizen plans. Additionally, some insurers set sub-limits on room rent, ICU charges, and specific treatments, which can significantly increase out-of-pocket expenses.
- Network Hospitals
Insurance companies have tie-ups with hospitals to provide cashless treatment, eliminating the need for upfront payments during hospitalization. When choosing a policy:
- Check if your preferred hospitals (including specialists and nearby facilities) are part of the insurer’s network.
- Look for an insurer with a wide hospital network, ensuring better accessibility in case of emergencies.
- Verify the cashless claim process to avoid paperwork hassles.
A policy with an extensive cashless hospital network provides ease of access to quality healthcare services.
- Claim Settlement Ratio (CSR)
The claim settlement ratio (CSR) indicates how efficiently an insurance company processes claims. A higher CSR means the insurer is more reliable. Ideally, choose an insurer with a CSR above 95%.
Additionally, check the Claim Settlement Turnaround Time (TAT)—a lower TAT ensures that claims are processed quickly.
- Renewability & Premium Loading
- Lifetime Renewability: Opt for a policy that offers lifetime renewability to ensure continued coverage even in old age.
- Premium Loading: Some insurers increase premiums after claims. Choose a plan that does not have excessive premium hikes (loading) post-claims.
A transparent renewal policy helps avoid financial shocks later in life.
- Reputation & Customer Support
A well-established insurer with a strong market reputation is more likely to provide better claim support. When evaluating an insurance company, check:
- Customer reviews and feedback on claim settlement and service quality.
- Ease of claim filing – Does the insurer offer online claims or a dedicated support team?
- 24/7 customer service availability – Essential for emergencies.
Choosing an insurer with a solid reputation and responsive customer support ensures a smooth claim experience.
Why Compare Health Insurance Online?
Buying health insurance is a crucial financial decision, and comparing policies online can help you find the best coverage at the most competitive rates. Online platforms provide detailed comparisons of multiple policies, allowing you to evaluate different plans quickly, conveniently, and transparently. Here’s why comparing health insurance online is a smart choice:
Exclusive Online Discounts – Many insurers offer lower premiums and additional benefits for online buyers.
Better Coverage for Your Needs – Compare multiple policies side by side to find one that best fits your health and budget needs.
Saves Time & Money – No need to visit agents or offices—get the best policy at competitive premiums online.
Check Policy Features & Exclusions – Ensure your chosen policy includes necessary benefits and doesn’t have hidden limitations.
Read Reviews & Claim Settlement Records – Understand real customer experiences before purchasing.
FAQs on Health Insurance
- Is it important to buy Health Insurance in India?
Although it’s not mandatory in India, it falls under the category of absolute necessity to cover illnesses that are common in all human beings. The earlier you get, the better benefits you can avail yourself of. - What is the average cost of health insurance in India?
The cost is different for Individual plans and family plans. Normally, it is Rs 10,000- Rs 17,000 annual payment for a Rs 5 Lakh family floater policy, whereas the same plan costs Rs 7,000 per year for a single person. - What happens if I miss paying the premium for my health insurance?
In such cases, normally the company gives you a grace period of up to 1-3 months. If you miss paying within that period, the policy will automatically lapse. - What is a waiting period in health insurance?
A waiting period is the time you must wait before certain benefits of the policy become active. It applies to pre-existing diseases, maternity benefits, and specific treatments. Waiting periods vary from 30 days to 4 years, depending on the policy.
5. How does a No-Claim Bonus (NCB) work in health insurance
NCB is a reward given if no claims are made during a policy year. It can either:
- Increase the sum insured without additional cost.
- Offer discounts on the premium for the next renewal.
6. Can I buy health insurance for my parents?
Yes, you can purchase a senior citizen health plan or include them in a family floater policy. Doing so also provides tax benefits under Section 80D.