The right health insurance policy is one with enough sum insured for hospital costs in your city, few hidden caps such as room-rent limits and disease-wise sub-limits, short waiting periods, and an insurer that settles claims reliably. Premium matters, but a cheap policy that pays only part of a bill is poor value. This checklist walks through each feature in the order that matters most.
Key takeaways
- Size your cover for a major hospitalisation in the city where you would actually be treated, not for an average claim.
- Room-rent caps, co-pay and sub-limits can shrink a payout far more than a small premium difference.
- Since April 2024, the pre-existing disease waiting period can be at most three years, and there is no upper age limit for buying a policy.
- A base policy plus a super top-up is often the most economical way to get high cover.
- Always read the Customer Information Sheet and the full policy wording before paying.
Step 1: Decide how much cover you need
Think in terms of one big hospitalisation
A single admission for cardiac surgery, cancer treatment or a long ICU stay can cost several lakh rupees in a private hospital. Your sum insured should cover such an event, with a buffer for medical inflation.
Adjust for your city and family
Hospital tariffs are usually highest in metros and large private hospitals, and lower in smaller cities. The table below is a rough starting point, not a rule. Your own needs depend on age, health history and where you expect to be treated.
| Situation | Common starting point for sum insured |
|---|---|
| Single adult, smaller city | ₹5 to ₹10 lakh |
| Single adult, metro | ₹10 to ₹15 lakh |
| Family of four, smaller city | ₹10 to ₹15 lakh |
| Family of four, metro | ₹15 to ₹25 lakh or more |
| Parents above 60 | Separate policy, as high as affordable |
Step 2: Family floater or individual policies?
A family floater shares one sum insured across everyone covered. It is usually cheaper than separate policies for a young couple with children, because the chance of everyone falling ill in the same year is low.
Individual policies give each person their own cover. They make more sense when one member is much older or has a chronic condition, since the eldest member's age largely drives a floater's premium.
Step 3: Check the fine print that reduces payouts
Room-rent limits
Many policies cap the room rent per day, for example at a percentage of the sum insured or at a fixed category of room. If you pick a costlier room, the insurer may reduce other related charges such as doctor fees and nursing in the same proportion. A policy with no room-rent cap, or one that allows any single private room, avoids this problem.
Co-payment
A co-pay means you bear a fixed share of every claim, such as 10% or 20%. It lowers the premium but raises your out-of-pocket cost when you need care. Co-pay is common in senior citizen plans and sometimes applies only when you are treated in a particular city zone.
Sub-limits and capped treatments
Some policies cap payouts for specific procedures, such as cataract surgery, joint replacement or certain modern treatments. Look for a list of these caps in the policy wording. Fewer sub-limits generally means more predictable claims.
Waiting periods
| Waiting period | What it means | What to look for |
|---|---|---|
| Initial waiting period | No claims for illness in the first 30 days (accidents usually covered) | Standard across most policies |
| Specific diseases | Listed conditions such as hernia or cataract covered only after a set time | Shorter is better |
| Pre-existing diseases | Conditions you already have are covered after this period | Since April 2024, no longer than 3 years; some plans offer less |
| Maternity | Delivery costs covered after a fixed period, if included | Check if you plan a family soon |
IRDAI rules also set a moratorium period. Once you have been continuously insured for 60 months, including time carried over through porting, the insurer cannot dispute a claim on grounds of non-disclosure or misrepresentation, except where fraud is proven.
Step 4: Compare insurers on service, not just price
Network hospitals
Check whether the hospitals you would realistically use are in the insurer's cashless network. A large network across India is useful, but the hospitals near your home matter most.
Claim settlement ratio vs incurred claim ratio
These two numbers are often confused.
| Ratio | What it measures | How to read it |
|---|---|---|
| Claim settlement ratio | Share of claims settled out of claims received in a year | Higher is generally better, but it does not show whether claims were paid in full |
| Incurred claim ratio | Claims paid as a share of premium earned | Very low may mean stingy payouts; very high may mean financial strain |
Neither figure tells the whole story. Look at both, along with complaint data and how quickly claims are processed.
Step 5: Look at features that add value over time
No-claim bonus
If you make no claim in a year, insurers may reward you at renewal, usually by raising the sum insured or offering a premium discount. Under the 2024 Master Circular, where offered, the policyholder chooses between the two.
Restoration or recharge benefit
Restoration refills your sum insured if it gets used up during the policy year. Check whether it applies to the same illness again or only to a different one.
Top-up and super top-up
A top-up pays only after a single claim crosses a set amount, called the deductible. A super top-up does the same, but the deductible applies to your total claims in a year, which makes it far more useful.
For example, a ₹5 lakh base policy combined with a super top-up of ₹20 lakh above a ₹5 lakh deductible gives you high total cover, often for less than a single ₹25 lakh policy would cost. Make sure the deductible matches your base cover so there is no gap.
Step 6: Switching insurers through porting
You can move your policy to another insurer at renewal without losing credit for waiting periods already completed. The new insurer may still underwrite you afresh and can decline the request or ask for medical tests.
Start the process well before renewal, ideally 45 to 60 days ahead, so there is time for paperwork. Do not let your existing policy lapse while the port is pending.
Step 7: Tax benefit on premiums
Premiums for health insurance can reduce your taxable income if you opt for the old tax regime. This deduction was long known as Section 80D. From 1 April 2026, the Income-tax Act, 2025 replaced the 1961 Act, and the same benefit now sits in Section 126.
| Who is covered | Maximum deduction per year |
|---|---|
| Self, spouse and dependent children | ₹25,000 (₹50,000 if the insured person is a senior citizen) |
| Parents | Additional ₹25,000 (₹50,000 if a parent is a senior citizen) |
| Preventive health check-ups | Up to ₹5,000, included within the limits above |
Premiums must be paid by a non-cash method, though preventive check-ups can be paid in cash. The deduction is not available under the default new tax regime. Check with a tax professional for your own situation.
Get unbiased help
Comparing policy wordings can be time-consuming, and the right choice depends on your family's age and health. If you would like a second opinion, you can request a free, no-obligation callback from an independent advisor through our free advice form. You are never required to buy anything.
Frequently asked questions
Is ₹5 lakh health insurance enough?
For a young single person in a smaller city, ₹5 lakh may cover most routine hospital stays. For families or anyone in a metro, it can fall short during a serious illness. A super top-up is an affordable way to raise cover without replacing your base policy.
Should I rely only on my employer's group health cover?
Group cover is useful, but it usually ends when you leave the job, and the sum insured may be modest. Having your own policy keeps your waiting periods running and protects you between jobs or after retirement.
Can I buy health insurance after age 65?
Yes. IRDAI removed the upper age limit for buying health insurance from April 2024, and insurers are expected to offer products for all age groups. Premiums will be higher, and the insurer may ask for medical tests.
Do I need to disclose minor health issues?
Yes. Disclose all existing conditions, medicines and past treatments honestly on the proposal form. Non-disclosure is one of the most common reasons for claim disputes before the moratorium period is complete.
What is the free-look period?
After you receive a new health policy, you get a free-look period, currently 30 days, to review it. If you cancel within this time, the premium is refunded after small permitted deductions.
Sources
- Insurance Regulatory and Development Authority of India: Policyholder portal
- Income Tax Department: Section 126, Income-tax Act, 2025
- Bima Bharosa grievance portal (IRDAI)
- Council for Insurance Ombudsmen
- National Health Authority: PM-JAY