Health Insurance in India: What to Buy, What to Skip

Rohit, 29, had a corporate health policy of ₹5 lakh and thought he was covered. Then he changed jobs, spent a month between companies and had an appendix operation. The bill was ₹1.4 lakh. He paid it from his savings, which were meant for something else.

The lesson isn't that he was careless. It's that employer insurance is a perk that depends on your job, not a plan you own.

• It leaves when you do. Cover ends when employment ends, often on your last working day.
• It's usually small. ₹3 to 5 lakh looks big until you price a serious illness in a private hospital.
• Waiting periods restart. A new policy at 40 treats your newly found condition as pre-existing.
• Premiums rise with age. Buying at 28 is far cheaper than at 38, and the early years of waiting periods pass while you are healthy.

If you are single and starting out, buy a personal policy even if your company covers you. The employer policy is a bonus.

You pay a premium each year. If you are hospitalised, the insurer pays eligible costs up to the sum insured.

There are two ways a claim is settled:

• Cashless: the hospital is in the insurer's network, and the insurer pays the hospital directly. You pay only non-covered items.
• Reimbursement: you pay first and claim later with bills and reports.

Cashless is smoother. Check that good hospitals near you are in the network.

Don't start with the premium. Start with how much cover you'd want in a bad year.

A rough guide for a metro city:

• Single, under 30: ₹10 lakh total cover (base plus top-up)
• Couple or small family: ₹15 to 25 lakh
• Parents over 60: at least ₹10 lakh, ideally more, in a separate policy

Medical costs in India rise at a high rate each year, so a cover that looks large now will shrink in real terms.

A super top-up policy is a cheap way to get large cover. It pays only after your expenses in a year cross a deductible (say ₹5 lakh).

Example: a ₹5 lakh base policy plus a ₹20 lakh super top-up with a ₹5 lakh deductible gives you protection up to ₹25 lakh. The top-up premium is much lower than a ₹25 lakh base policy.

Make sure the base policy and the top-up deductible match, and that you know how claims are coordinated between two insurers if they differ.

• Family floater: one sum insured shared by the family. Cheaper, and fine for young families.
• Individual policies: each person has their own cover. Better for parents, where one person's illness could use the whole floater.

A common setup is a floater for you, your spouse and children, plus separate policies for parents, because their premium and risk are higher.

This is where policies differ. Check these before buying:

If your policy caps room rent at ₹5,000 a day and you take a ₹10,000 room, many policies reduce the entire bill by the same ratio, including surgeon fees. A "cheaper" premium with a room rent cap can cost you more at claim time.

When you fill in the proposal form, you'll be asked about existing conditions, medicines and past surgeries. Tell the truth.

Insurers can reject a claim, or cancel a policy, for non-disclosure of material facts. Hiding a condition to save on the premium is the surest way to lose your claim. Honest disclosure may raise your premium or add a waiting period, but it protects the claim.

Exclusions vary, but these often appear:

• Cosmetic procedures
• Waiting-period illnesses within the period
• Some dental and vision care (unless specified)
• Injuries from some hazardous sports
• Self-inflicted harm and substance abuse treatment (varies)
• Non-medical items such as gloves and some consumables, unless the policy covers them

Read the list of non-payable items and exclusions on the policy wording. The brochure is a summary, the wording is the contract.

Premiums qualify for deduction under Section 80D, but only under the old tax regime: up to ₹25,000 for you, spouse and children, and extra for parents (higher if they are senior citizens). Under the new regime there is no deduction. Don't buy insurance just for tax. Compare regimes in old vs new tax regime.

• Buy directly from the insurer or a trusted platform, and keep the policy document.
• Portability: you can move a policy to another insurer at renewal without losing waiting-period credit, but the new insurer can underwrite you again. Do it for a better policy, not to save a small amount.
• Pay on time. A lapsed policy can lose the waiting-period credit.
• Tell the family where the policy and e-card are.

Health insurance sits in the foundation, along with an emergency fund and life cover. Do these before you start investing:

1. An emergency fund
2. Health insurance (this article)
3. Term life insurance, if anyone depends on your income
4. Then investing through a SIP

For most people in a metro, no. A base of ₹5 lakh plus a super top-up that brings the total to ₹15 to 25 lakh is a more realistic plan.

Yes, if you can. Premiums are higher and waiting periods apply, but cover beats paying a large bill from your own savings. Compare policies that have shorter waiting periods and no heavy co-pay.

They pay a lump sum when you are diagnosed with a listed illness, which can help with income loss. They are an addition, not a substitute for a base health policy.

Ask for the rejection reason in writing, check it against the policy wording, and write to the insurer's grievance officer. If unresolved, you can use the IRDAI Bima Bharosa portal and then the Insurance Ombudsman.

Not necessarily. Many insurers cover it after the waiting period. Some may add a premium loading. Disclose it and compare offers.

This article is educational and not a product recommendation. Policy features and tax rules change. Read the policy wording and the insurer's current terms before buying.