Health Insurance

A health insurance policy pays for hospitalisation and related medical costs, up to the sum insured, in exchange for an annual premium. Most policies sold in India are indemnity plans: they reimburse actual expenses within the policy's limits. Fixed-benefit plans, such as critical illness cover, pay a set amount on a defined event, whatever the bill.

A serious illness or hospital stay can cost more than years of savings. Health cover is what keeps an emergency from becoming a financial setback.

• Individual policies give each person their own sum insured.
• Family floater policies share one sum insured across the family. They cost less, but one large claim can use up the cover for everyone that year. Parents are often better covered on a separate policy.

Think about the cost of treatment at the hospitals you would actually use, the size of your family, the ages of those covered, and medical inflation, which has historically run ahead of general inflation. A cover that is comfortable today can look thin in a few years; a base policy plus a super top-up is one way to build headroom without a proportionate rise in premium.

Health policies are renewable for life. An insurer cannot refuse to renew a policy because you made claims, except in cases of fraud or non-disclosure. Renew before the due date — a break in cover can reset waiting periods.

Most policies have an initial waiting period for illnesses (not accidents), specific waiting periods for listed conditions, and a waiting period for pre-existing diseases, which IRDAI rules cap at three years. Declaring every pre-existing condition on the proposal is essential.

After five years of continuous cover — the moratorium period — an insurer cannot contest a claim on grounds of non-disclosure or misrepresentation, except in cases of established fraud.

At a network hospital, the insurer can settle bills directly — cashless. Under IRDAI's 2024 master circular, insurers must decide on cashless authorisation requests within one hour and approve final discharge within three hours of the hospital's request. At other hospitals you pay first and claim reimbursement with the bills and reports.

Group cover from an employer usually ends when you leave the job, may not cover parents adequately and can change at renewal. Many people keep a personal policy alongside it, so cover continues regardless of employment.

A super top-up pays once your total claims in a year cross a chosen deductible. Combined with a base policy, it is a cost-efficient way to add large cover.

CompoundX currently offers insurance education and need estimation only. Insurance can be sold only by insurers and IRDAI-registered intermediaries; if CompoundX holds such a registration, it is shown on our Disclosures page. The Wealth Lab includes a protection check that shows how your health cover compares with your household's situation.

For illustration, assume a ₹4 lakh hospital bill on a policy with a 20% co-payment. You pay ₹80,000 and the insurer pays ₹3.2 lakh — provided no other limit applies. If the room you chose exceeds the room-rent limit, many policies reduce associated charges proportionately too. Hypothetical numbers only.

Lower premiums often come from these features. Know which ones your policy has.

The claim settlement ratio shows the share of claims settled; the incurred claims ratio shows claims paid as a share of premiums earned. Both are published in insurers' public disclosures. Read them over several years, alongside settlement speed and complaint data, not as a single score.

You can move your policy to another insurer at renewal while keeping credit for waiting periods already served, up to the earlier sum insured. Apply before the renewal date, and disclose your health fully on the new proposal.

• Health insurance premiums may be deductible under the old tax regime, with separate limits for yourself and family and for parents (higher for senior citizens). Preventive health check-ups are included within those limits.
• Individual health insurance premiums, including family floater and senior-citizen policies, have been exempt from GST since 22 September 2025.

Tax rules change and depend on your circumstances. This is general education, not tax advice — check the latest provisions or speak to a tax professional.

Write to the insurer's grievance officer first. If you aren't satisfied with the response, you can escalate through IRDAI's Bima Bharosa portal or approach the Insurance Ombudsman. Our Grievance Redressal page explains these routes.