What to Look for When Buying Health Insurance in India

6 min read | Updated on May 29, 2025, 14:24 IST

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Securing a job in a first-tier city like Delhi, Sujata asked her parents to move in with her. Happily, her parents visited the metropolitan city for the first time, mesmerized by its bustling atmosphere. However, she later discovered that her father was experiencing health issues due to pollution and limited physical activity. Understanding the high cost of the city's healthcare system, she quickly decided to purchase health insurance for her father to help manage her expenses. She immediately consulted some of her friends and colleagues for recommendations on the best insurance companies. With their suggestions, she ultimately selected a reputable health insurance provider. The company accommodated her preferences, including and excluding certain items. She also reviewed the hospital lists, renewal policies, and the diseases covered in her policy. Her decision helped her in medical emergencies. Today, she realizes she made a quick decision and never forgets to advise her friends and family to seek health insurance as soon as they can afford it.

Healthcare costs in India are rapidly rising due to the evolution of medical facilities and inflation. As a result, a minor medical emergency can significantly impact your finances. For middle-class households, medical expenses, including hospitalization and post-treatment care, can feel overwhelming. This burden also encroaches on future well-being; if a casualty occurs, the pain can not be measured in currency.

Health insurance serves as a comforting solution for these unforeseen circumstances. In the face of uncertain emergencies, health insurance not only provides financial protection but also offers psychological reassurance, ensuring you and your loved ones are prepared for any health-related eventuality.

The key factors outlined in this guide will help you select the ideal health insurance coverage. It will enable you to make informed decisions based on your specific requirements, thereby putting you in control of your health and financial well-being.

Assess Your Needs and Choose the Right Policy Type

The first step in purchasing health insurance is to assess the medical needs of you and your family members. Determine the most suitable insurance plan based on your specific situation.

Individual vs. Family Floater Plans:

Individual Plans	Family Floater Plans
Provides coverage for one person with a dedicated sum insured	Covers all family members under one shared sum insured.
Best suited for individuals or the elderly with specific health concerns.	Ideal for young and healthy families seeking cost-effective coverage.
Each member requires a separate policy and premium.	One premium covers the entire family collectively.
Offers comprehensive protection for individual health needs.	Offers flexibility in usage but depends on the health of all members.

Next, consider specialized plans. For instance, in specialized family plans, maternity insurance coverage offers specific benefits. The senior citizen’s plan includes medicare coverage for the typical health needs of senior citizens. Moreover, the critical illness policies can provide benefits for a single payment to Individuals who receive a severe medical diagnosis of cancer or heart disease.

Finally, determine the coverage amount (sum insured). The proper approach to selecting a sum insured amount requires selecting coverage that equals six times your monthly income. Such coverage safeguards you against rising medical costs.

Understand Policy Inclusions and Exclusions

Before purchasing, you must consider the inclusions and exclusions that a policy has to offer. This practice will help you prepare for and manage unpleasant surprises when filing a claim.

General Inclusions	General Exclusions
Hospitalisation Expenses	Plastic and cosmetic surgeries, unless required for core treatment
Pre and Post-Hospitalisation Expenses	Vision and dental treatments (unless caused by accidents)
Ambulance Charges	Certain Pre-Existing Conditions
Daycare Procedures	Self-inflicted injuries

Note: Your policy's inclusions and exclusions might differ from the above list. Please read the entire policy thoroughly to determine the exact inclusions and exclusions.

Evaluate Waiting Periods and Pre-Existing Disease Coverage

Some plans often offer additional coverage benefits that a policyholder receives after a certain time, such as:

Waiting Periods

Most plans offer waiting periods of 1-2 years. They include treatments for hernia or cataract surgeries and provide special benefits for maternity-related matters.

Pre-Existing Diseases (PED)

If you have an existing health condition, purchasing a new policy will be regarded as having a pre-existing disease. If you maintain continuous coverage, you may qualify for benefits after 2-4 years. Disclosing your medical history fully will help you select the best policy.

Check for Co-Payment Clauses and Sub-Limits

Co-payment

A co-payment is the amount that a patient must pay as a specified percentage of their claim before insurance benefits are applied. You would need to cover 10% of your healthcare costs by paying a co-payment, as defined in a 10% clause; however, your insurance provider would handle the remaining 90%. Senior citizen insurance has built-in co-payment obligations that policyholders must fulfill.

Sub-Limits

Certain specific expenses are not covered by some policies, such as,

Room rent limits
ICU charges
Specific treatments, such as cataracts or knee replacements

Policyholders should choose insurance plans with negligible or no sub-limits, as these limitations can reduce their valid insurance payout.

Verify Network Hospitals and Cashless Facilities

Check which hospitals are covered under your policy and whether they offer cashless facilities before purchasing a policy.

Network Hospitals

Policyholders can enjoy access to a variety of hospitals that have partnered with their insurer, ensuring they receive top-notch healthcare delivery. Select an insurer with numerous hospital connections, particularly those located near your place of residence or workplace.

Cashless Facilities

Through cashless treatment, you can obtain healthcare services by avoiding initial payments because the insurance company pays medical bills directly to the hospital. Customers benefit from emergencies because the choice of hospitals matters, so inspect which ones belong to the insurer's cashless network.

Consider Additional Benefits and Riders

Several policies offer additional benefits based on your specific disease; be sure to review them to determine if you qualify for these benefits.

No Claim Bonus (NCB)

You receive a No Claim Bonus, which provides 5–50% additional coverage beyond your original sum insured due to your insurance claim-free year, but your premiums remain the same. The cumulative effect of this strategy results in higher insurance coverage.

Riders

Every base policy can be elevated through optional add-on features known as riders. Popular riders include:

Maternity cover
Critical illness rider
Personal accident cover
Hospital cash allowance

Select riders based on your lifestyle, family planning, and health risks.

Review the Claim Settlement Process and Ratio

It is essential to analyze both the Claim Settlement process and the ratio.

Claim Settlement Ratio (CSR)

Considered a key metric in insurance assessments, CSR indicates the percentage of claims that insurers successfully pay out of their total claims. Better reliability is achieved when a company maintains a claim settlement ratio of more than 90%. The Claim Settlement Ratio stands as one of the primary factors for evaluating insurance providers.

Process

Understand the steps to file a claim:
Notify the insurer or TPA (Third Party Administrator)
Submit the required documents (bills, prescriptions, reports)
Track the claim status online.

Select insurers are recognized for their efficient and hassle-free claim processing.

Understand Portability and Renewal Conditions

The main focus should be on portability and renewable options. Failing to manage both can hamper your benefits in policies.

Portability

You can transfer your health policy to another insurance company because portability allows you to keep accumulated benefits, such as waiting periods and No Claim Bonus. Procedures for porting health insurance typically begin at least 45 days before the upcoming renewal date.

Renewal

The policy must allow lifetime renewability, which lets you keep your coverage active from the beginning to the end of your life. Policyholders must renew their coverage promptly, as failure to do so will result in the termination of their benefits or require them to restart their waiting periods.

Conclusion

You need to carefully assess your health needs and understand the policy characteristics when selecting the right health insurance policy in India. Focus also on understanding waiting periods as well as exclusions and claim procedures. You should not let low premiums trick you into selecting an insurance policy, since comprehensive coverage, along with reliable service and enduring benefits, deserves your main focus.

Take a thorough review of every policy document, along with checking different plans, and then consult experts before choosing your plan.

About Author

Upstox Desk

Team of expert writers dedicated to providing insightful and comprehensive coverage on stock markets, economic trends, commodities, business developments, and personal finance. With a passion for delivering valuable information, the team strives to keep readers informed about the latest trends and developments in the financial world.