Why Health Insurance Is Essential
Medical inflation in India runs at 10–15% annually. A single hospitalisation (e.g. cardiac procedure, cancer treatment, or major surgery) can cost ₹3–15 lakh or more and wipe out years of savings. Health insurance provides financial protection and ensures you and your family get quality healthcare without the stress of mounting bills. Employer cover is helpful but ends when you leave the job. A personal health policy stays with you. This guide helps you plan the right coverage based on city, family size, age, and future needs.
Key Takeaways
- Metro: ₹10–20L base: For 2–4 members; add more if parents included
- Tier 2: ₹5–10L base: Lower costs; still factor 10%+ medical inflation
- Add super top-up: ₹25–50L extra cover at low cost
- Check sub-limits: Room rent, ICU; avoid 1% caps in metros
- Use calculator: Get personalised recommendation by city and family
How Much Coverage Do You Need?
For individuals in metros, ₹5–10 lakh is the minimum; ₹10–15 lakh is safer. For families of 2–4 in metros, ₹10–20 lakh base is recommended. Add ₹5–10 lakh if including parents. In Tier 2 cities, costs are 30–40% lower; ₹5–15 lakh for families may suffice. Critical illness or prolonged treatment can exceed ₹20–30 lakh; a super top-up of ₹25–50 lakh (with ₹5–10L deductible) is a cost-effective way to get ₹50L+ total cover. Use our Health Insurance Calculator for a tailored recommendation.
Coverage by City and Family
📊 Recommended base sum insured (floater)
Types of Health Insurance
- Individual: One person, dedicated sum insured; good when risk profiles differ
- Family Floater: Shared pool for spouse + kids; cost-effective for young families
- Senior Citizen: For 60+; higher premium, may have co-pay; consider separate policy for parents
- Critical Illness: Lump sum on diagnosis of cancer, heart attack, etc.; supplement to base
- Top-up / Super Top-up: Extra cover after deductible; ₹50L top-up can cost ₹3–6K/year
Room Rent and Sub-Limits
Many policies cap room rent at 1% of sum insured per day. A ₹10L policy allows ₹10,000/day (enough in Tier 2, often short in metros) where rooms cost ₹12,000–15,000/day. The difference may be deducted from your claim. Prefer policies with no room rent sub-limit or a higher limit. Also check ICU caps, procedure-wise limits, and day-care limits. These sub-limits can significantly reduce the effective cover. Read the policy document before buying.
Tax Benefits (Section 80D)
Health insurance premiums qualify for deduction under Section 80D. For self, spouse, and children: up to ₹25,000. For parents: up to ₹25,000 (or ₹50,000 if parents are 60+). Total deduction can be ₹50,000–75,000 depending on your and parents' ages. Preventive health check-up up to ₹5,000 is included in this limit. This makes health insurance more affordable from a tax perspective. Ensure you have the premium receipts and pay from your own account for the deduction.
When to Buy and Review
Buy health insurance early (in your 20s or 30s) when you're healthy. Waiting periods for pre-existing conditions (2–4 years) mean buying after diagnosis can delay coverage for that condition. Review coverage every 2–3 years. As family size grows, parents age, or medical inflation erodes value, top up or buy additional cover. Porting to another insurer can preserve continuity benefits if you're unhappy with your current policy.
Using Our Health Insurance Calculator
Our Health Insurance Calculator takes your city, family size, ages, and existing cover as input. It suggests the right sum insured and shows approximate premium range. Use it to compare your current coverage with what you need, and to plan before buying or renewing.
Disclaimer
Coverage amounts are indicative. Policy terms vary by insurer. Consult an advisor for your specific situation.