What Health Insurance should you buy in India: A comprehensive guide
- Manan Mehta
- Nov 19
- 16 min read
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What Health Insurance should you buy in India
Buying health insurance in India can feel like navigating a maze blindfolded. With 28 insurance companies offering hundreds of plans, each loaded with confusing jargon and fine print, most people either buy the wrong policy or delay buying altogether—both costly mistakes.
This comprehensive guide cuts through the complexity, showing you exactly which health insurance to buy, how much coverage you need, which features matter, and which ones you should ignore.
Why Health Insurance Is Non-Negotiable in India
Before diving into which policy to buy, let's understand why health insurance has become essential rather than optional in modern India.
The Medical Inflation Crisis
Healthcare costs in India are rising at an alarming rate—approximately 10-14% annually, double the general inflation rate. A hospitalization that cost ₹2 lakh in 2020 now costs approximately ₹2.8-3 lakh in 2025.
Without insurance, a single medical emergency can wipe out years of savings. Consider these sobering facts:
ICU costs: ₹15,000-40,000 per day in metropolitan hospitals
Heart bypass surgery: ₹2.5-8 lakh
Cancer treatment: ₹5-20 lakh depending on stage and protocol
Kidney transplant: ₹5-15 lakh
Premature baby care: ₹10,000-50,000 per day in NICU
A family earning ₹10 lakh annually can see their entire year's income disappear in a single hospitalization.
Financial Protection for Your Family
Health insurance isn't just about paying medical bills—it's about protecting your family's financial future. Without adequate coverage:
Emergency fund gets depleted
Long-term investments must be liquidated prematurely
Retirement corpus gets raided
Children's education savings are sacrificed
Family may take high-interest loans
With proper health insurance, medical bills become the insurance company's responsibility, allowing your savings and investments to continue growing uninterrupted.
If you want someone to assist you with your investments or insurance and grow your wealth, feel free to contact us. Our team of experts will be happy to help. You can also email us at help@reymanwealth.com
How Much Health Insurance Coverage Do You Actually Need?
This is the first and most critical question. Buy too little coverage, and you'll face out-of-pocket expenses during hospitalization. Buy unnecessarily high coverage at an early age, and you're paying excessive premiums for protection you might not need yet.
The 50% Annual Income Rule
A widely recommended baseline is health coverage worth at least 50% of your annual income.
Example:
Annual income: ₹20 lakh
Minimum health coverage: ₹10 lakh
This ensures your policy can handle significant medical expenses relative to your earning capacity.
The ₹5-10 Lakh Minimum Threshold
Regardless of income, insurance experts unanimously recommend a minimum coverage of ₹5-10 lakh for individuals in India.
Why this minimum?
Even basic surgeries and treatments now cost:
Appendectomy: ₹60,000-1.2 lakh
Normal delivery: ₹40,000-80,000
C-section delivery: ₹80,000-1.5 lakh
Hip replacement: ₹1.5-3 lakh
Angioplasty: ₹1.5-3.5 lakh
A ₹3 lakh policy might seem adequate, but one serious illness will exhaust it completely.
Coverage Recommendations Based on Location
Healthcare costs vary dramatically between metropolitan cities, tier-2 towns, and tier-3 cities.
Location | Individual Plan | Family Floater | Senior Citizen |
Tier-1 Cities (Delhi, Mumbai, Bangalore, Chennai) | ₹10 lakh+ | ₹30 lakh+ | ₹20 lakh+ |
Tier-2 Cities (Pune, Jaipur, Lucknow, Kochi) | ₹5-10 lakh | ₹20 lakh+ | ₹15 lakh+ |
Tier-3 Cities (Mysore, Raipur, Nashik) | ₹5 lakh | ₹10 lakh+ | ₹10 lakh+ |
Why the difference?
A private hospital room in Mumbai costs ₹8,000-15,000 per day. The same standard room in a tier-3 city costs ₹2,000-4,000 per day. Surgery fees, consultation charges, and diagnostic costs follow similar patterns.
Age-Based Coverage Guidelines
Your age significantly impacts both your coverage needs and premium costs.
In Your 20s:
Coverage needed: ₹2-5 lakh initially
Why: Lower health risks, fewer pre-existing conditions
Strategy: Start early to lock in low premiums and build no-claim bonus
Consider increasing coverage as income grows
In Your 30s:
Coverage needed: ₹5-10 lakh minimum
Why: Family responsibilities increase, lifestyle diseases emerge
Strategy: Opt for family floater if married with children
In Your 40s:
Coverage needed: ₹10-20 lakh
Why: Higher risk of chronic conditions like diabetes, hypertension
Premium consideration: Still affordable, buy higher coverage before premiums spike
50+ Years:
Coverage needed: ₹20-30 lakh+
Why: Significantly higher health risks, pre-existing conditions common
Challenge: Higher premiums, longer waiting periods for pre-existing diseases
Family Size Matters
For families, a family floater plan typically makes more financial sense than individual policies.
Family Floater Advantages:
Lower combined premium than multiple individual policies
Shared sum insured across all family members
Simpler management with single policy
Probability of all members being hospitalized simultaneously is low
Recommended Family Floater Coverage:
Family of 2: ₹10-15 lakh
Family of 3-4: ₹20-30 lakh minimum
Family with senior citizens: ₹30-50 lakh+
Additional Factors Influencing Coverage Amount
Pre-existing Conditions:If you or family members have diabetes, hypertension, thyroid disorders, or other chronic conditions, opt for higher coverage (₹15-25 lakh+) as treatment costs compound over time.
Lifestyle and Risk Factors:
Smokers, heavy drinkers: Higher coverage needed due to increased health risks
High-stress professions: Consider additional ₹5-10 lakh coverage
Sedentary lifestyle: Increased risk of lifestyle diseases
Family Medical History: If your family has a history of cancer, heart disease, diabetes, or other genetic conditions, buy ₹20-30 lakh coverage even in your 30s.
Essential Features You Must Have in Your Health Insurance
Not all health insurance policies are created equal. The difference between a good policy and a bad one often lies in these critical features.
1. No Room Rent Limits (Critical Must-Have)
This is perhaps the most important feature and the one that catches most policyholders by surprise.
What is Room Rent Limit?
Many policies cap the daily room rent at 1-2% of sum insured. For a ₹5 lakh policy, this means ₹5,000-10,000 per day.
The Hidden Trap:
If you choose a room that costs ₹15,000/day when your limit is ₹10,000/day, the insurer doesn't just refuse to pay the extra ₹5,000. Instead, they apply proportionate deduction to your entire claim.
Real Example:
Policy: ₹5 lakh with 1% room rent cap = ₹5,000/day limit
Your room: ₹10,000/day (double the limit)
Hospital bill: ₹2 lakh (including ₹40,000 for room, ₹50,000 surgeon fee, ₹60,000 for procedures, ₹50,000 for medicines/tests)
What you expect: Insurance pays ₹1.9 lakh (₹2 lakh minus ₹10,000 extra room cost for 2 days)
What actually happens: Insurance pays only ₹1 lakh (50% of entire bill because you exceeded room limit by 50%)
You end up paying ₹1 lakh out-of-pocket despite having ₹5 lakh coverage!
Solution: Always choose policies with NO room rent limits or "any room category" coverage.
2. No Co-payment Clause (Critical Must-Have)
Co-payment means you must pay a fixed percentage of every claim—typically 10-20%.
Example:
Hospital bill: ₹4 lakhCo-payment: 20%You pay: ₹80,000Insurance pays: ₹3.2 lakh
The Math That Doesn't Work:
Insurers offer 20-30% premium discounts for accepting co-payment. Sounds attractive, but consider:
Annual premium without co-pay: ₹10,000
Annual premium with 20% co-pay: ₹7,000 (saving ₹3,000)
One hospitalization costing ₹2 lakh means:
Your co-payment: ₹40,000
Years needed to recover through premium savings: 13+ years
When Co-payment Makes Sense:
Only for senior citizens (60+) with pre-existing conditions where premiums are very high and co-payment significantly reduces cost.
Recommendation: Avoid co-payment for anyone under 60 years of age.
3. No Disease-Wise Sub-limits (Critical Must-Have)
Some policies offer attractive ₹10 lakh coverage but hide disease-wise sub-limits in fine print.
Example of Sub-limits:
Cardiovascular diseases: ₹2.5 lakh maximum
Knee replacement: ₹2.75 lakh maximum
Spinal surgery: ₹2 lakh maximum
Cataract: ₹40,000 per eye
The Problem:
You think you have ₹10 lakh coverage, but when you need heart surgery costing ₹5 lakh, the insurer only pays ₹2.5 lakh, leaving you with ₹2.5 lakh out-of-pocket expense.
Recommendation: Verify that your policy has NO disease-wise sub-limits. This ensures your full sum insured is available regardless of illness type.
4. Pre and Post-Hospitalization Coverage (Must-Have)
Medical expenses don't begin and end at the hospital door. Diagnostic tests before admission and follow-up care after discharge cost significant money.
What to Look For:
Pre-hospitalization coverage: 30-60 days before admission
Post-hospitalization coverage: 60-90 days after discharge
Typical Pre-Hospitalization Expenses:
Blood tests, ECG, X-rays: ₹5,000-15,000
MRI/CT scans: ₹8,000-25,000
Specialist consultations: ₹1,000-3,000
Typical Post-Hospitalization Expenses:
Follow-up consultations: ₹5,000-15,000
Medications: ₹10,000-50,000
Physiotherapy sessions: ₹500-2,000 per session
Home care nursing: ₹1,500-3,000 per day
Without this coverage, you could spend ₹50,000-1 lakh on pre and post-hospitalization care even though your surgery was covered.
Recommendation: Ensure minimum 30 days pre and 60 days post-hospitalization coverage.
5. Daycare Treatment Coverage (Must-Have)
Modern medicine has made many procedures possible without overnight hospital stays. Treatments completed within 24 hours are called daycare procedures.
Common Daycare Treatments:
Chemotherapy
Dialysis
Cataract surgery
Appendectomy
Hernia repair
Tonsillectomy
Dental surgeries
Laser treatments
These procedures cost ₹40,000-2 lakh but many older policies only cover hospitalization exceeding 24 hours.
Recommendation: Verify your policy covers daycare treatments explicitly. Most modern comprehensive plans include this automatically.
6. Restoration/Reload Benefit (Highly Recommended)
Restoration benefit is a game-changer, especially for family floater policies.
How It Works:
Your ₹10 lakh policy gets "restored" to the original ₹10 lakh after you exhaust it due to a claim.
Example Without Restoration:
Family floater: ₹10 lakh
Father hospitalized, claim: ₹7 lakh
Remaining coverage for rest of year: ₹3 lakh
Mother needs surgery costing ₹5 lakh
You pay ₹2 lakh out-of-pocket
Example With Restoration:
Family floater: ₹10 lakh with restoration
Father hospitalized, claim: ₹7 lakh
Policy restored to ₹10 lakh
Mother needs surgery costing ₹5 lakh
Insurance pays full ₹5 lakh
You pay nothing
Types of Restoration:
Unlimited restoration: Cover restores after each claim (best option)
Limited restoration: Cover restores once per year
Same illness exclusion: Won't restore for same illness (avoid if possible)
Recommendation: Prioritize policies with unlimited restoration benefit, especially for family floaters.
7. Low Waiting Periods (Important)
Waiting periods determine when various coverages become active.
Types of Waiting Periods:
Initial/General Waiting Period: 30-90 days
No claims accepted except accidents
Standard across most policies
Unavoidable
Pre-existing Conditions: 2-4 years
Conditions you have before buying policy (diabetes, hypertension, etc.)
This is the crucial waiting period to compare
Can range from 24-48 months depending on insurer
Specific Diseases/Procedures: 1-2 years
Cataract, hernia, ENT disorders, joint replacements, etc.
Varies significantly between insurers
Maternity Coverage: 9 months to 4 years
Usually 24-48 months
Only relevant if planning children
Comparison of Waiting Periods:
Feature | Short Wait (Better) | Long Wait (Avoid) |
Initial period | 30 days | 60-90 days |
Pre-existing diseases | 24 months | 36-48 months |
Specific procedures | 12-18 months | 24-36 months |
Maternity | 9-12 months | 36-48 months |
Recommendation: Choose policies with shortest waiting periods, especially for pre-existing conditions (aim for 24 months maximum).
8. No-Claim Bonus (Nice to Have)
Insurers reward healthy years by increasing your sum insured without increasing premiums.
How It Works:
For every claim-free year, your cover increases by 10-50% (cumulative) up to a maximum (usually 100-200% of base sum insured).
Example:
Base cover: ₹5 lakh
No-claim bonus: 50% per year, max 200%
Year 1 (no claim): Cover becomes ₹7.5 lakh
Year 2 (no claim): Cover becomes ₹10 lakh
Year 3 (no claim): Cover becomes ₹12.5 lakh
Year 4 (no claim): Cover becomes ₹15 lakh (capped at 200%)
If You Claim: Bonus reduces by same percentage (typically 50%) in following year.
Recommendation: NCB of 50%+ per year is valuable; anything below 10% is marketing gimmick.
If you want someone to assist you with your investments or insurance and grow your wealth, feel free to contact us. Our team of experts will be happy to help. You can also email us at help@reymanwealth.com
Features That Look Good But Often Aren't Worth It
Marketing makes these features sound essential, but they frequently cost more than they're worth.
1. Maternity Coverage (Usually Not Worth the Extra Cost)
Maternity benefits sound appealing when planning a family, but the economics rarely work in your favor.
Why It's Expensive:
Insurers know with near certainty they'll pay out for maternity. Unlike accidents or illnesses (which are uncertain), planned pregnancies guarantee claims. Therefore, insurers significantly increase premiums or limit coverage.
The Math:
Without maternity coverage:
Annual premium: ₹12,000
Delivery costs (normal): ₹40,000-80,000
Delivery costs (C-section): ₹80,000-1.5 lakh
With maternity coverage:
Annual premium: ₹18,000-25,000 (₹6,000-13,000 extra annually)
Waiting period: 24-48 months before coverage starts
Coverage limit: Often capped at ₹50,000-1 lakh
Total extra premium paid over 3 years: ₹18,000-39,000
Net benefit: ₹11,000-82,000
The Reality:
After waiting 2-4 years and paying ₹20,000-40,000 in extra premiums, you get ₹50,000-1 lakh coverage. Often, paying out-of-pocket is more economical.
When It Makes Sense:
Only if you're definitely planning multiple children and the policy offers high maternity coverage (₹1 lakh+) with reasonable premium increase and short waiting period (9-12 months).
Recommendation: For most people, skip maternity coverage and pay delivery expenses from savings or emergency fund.
2. OPD (Outpatient Department) Coverage (Rarely Worth It)
OPD coverage reimburses doctor consultations, minor tests, and pharmacy bills that don't require hospitalization.
Why It Sounds Great:
Everyone visits doctors multiple times a year. Getting reimbursed for ₹500-2,000 consultations seems valuable.
Why It's Usually Not:
Insurers aren't foolish. They know you'll definitely use OPD benefits, so they:
Increase premiums substantially (₹3,000-8,000 extra annually)
Cap OPD benefits at ₹3,000-10,000 per year
Impose sub-limits per consultation (₹500-750 per visit)
Require extensive documentation
The Math:
OPD premium increase: ₹5,000/yearOPD benefit cap: ₹5,000/year. Net benefit: ₹0
You're essentially prepaying your doctor visits through insurance premiums, plus dealing with claim paperwork.
When It Makes Sense:
Only if you have chronic conditions requiring frequent specialist consultations (₹2,000+ per visit) and the OPD benefit significantly exceeds the premium increase.
Recommendation: Skip OPD coverage; pay consultation fees directly.
3. Free Health Checkups (Minor Perk, Not Decision-Maker)
Many policies offer "free" annual health checkups worth ₹1,000-3,000.
Reality Check:
Basic health checkup actually costs ₹800-2,000 in the market
Insurance companies have negotiated rates with specific labs
Often available only once in 2-3 years, not annually
May require claim-free year to qualify
Limited test panel (basic blood work, not comprehensive)
Recommendation: Don't choose a policy primarily for free checkups, but consider it a nice bonus if included.
4. AYUSH Coverage (Minimal Utility for Most)
AYUSH covers Ayurveda, Yoga, Unani, Siddha, and Homeopathy treatments in government-certified facilities.
The Limitation:
Only covers hospitalization in certified AYUSH facilities (very limited)
Most people seeking alternative medicine do so on outpatient basis (not covered)
Alternative medicine rarely requires expensive hospitalization
Recommendation: AYUSH coverage is nice to have but should never be a deciding factor.
Understanding Network Hospitals: Why This Matters More Than You Think
Network hospitals can make the difference between a smooth, cashless experience and a painful reimbursement nightmare.
What Are Network Hospitals?
Network hospitals have agreements with insurance companies allowing cashless treatment—the hospital bills the insurer directly instead of you paying upfront and then claiming reimbursement.
Benefits of Network Hospitals
1. Cashless Treatment
Walk in with health card, walk out without paying
No need to arrange large sums immediately during emergencies
Eliminates reimbursement claim hassles and delays
2. Faster Claim Approval
Pre-authorization within 2-4 hours for planned procedures
Direct communication between hospital and insurer
Minimal paperwork required from you
3. Quality Assurance
Insurance companies verify hospital standards before empanelment
Regular audits ensure quality care
Accredited facilities with qualified doctors
4. Cost Benefits
Negotiated rates between insurer and hospital
No surprise bills or hidden charges
Transparent pricing
Non-Network Hospitals: The Reimbursement Challenge
If you get treatment at a non-network hospital:
You pay the entire bill upfront
Submit physical claim forms with original bills
Wait 15-45 days for reimbursement processing
Risk of claim rejection due to documentation issues
May face deductions or challenges to bill amounts
When You Might Use Non-Network Hospitals:
Medical emergency when nearest facility isn't in network
Specialist doctor only practices at non-network hospital
Traveling and no network hospital nearby
Evaluating Network Hospital Coverage
Key Questions to Ask:
How many network hospitals in my city? (Minimum 5-10 in your area)
Are reputable hospitals included? (Check for hospitals you'd actually want to use)
Network coverage in cities you frequently travel to? (Important for business travelers)
Total network size nationally? (Larger is better: aim for 8,000-15,000+ hospitals)
Top Insurers by Network Size (2025):
Insurer | Network Hospitals |
HDFC Ergo | 16,000+ |
SBI General | 16,000+ |
Manipal Cigna | 15,000+ |
Star Health | 14,000+ |
TATA AIG | 12,000+ |
Care Health | 11,400+ |
Aditya Birla | 11,000+ |
Niva Bupa | 10,000+ |
Recommendation: Choose insurers with at least 10,000+ network hospitals and strong presence in your city.
Top Health Insurance Plans in India (2025)
Based on comprehensive analysis of insurer ratings, claim settlement ratios, features, and affordability, here are the best health insurance plans. Note that these are not recommendations from us. These are just what we think are some of the best insurance plans in India currently.
1. HDFC Ergo Optima Secure
Coverage: ₹5 lakh to ₹2 crore
Key Features:
Instant 2X coverage (₹10 lakh for ₹5 lakh premium)
Coverage increases annually regardless of claims
No room rent limit
Coverage for consumables (syringes, gloves, etc.)
Unlimited restoration benefit
16,000+ network hospitals
Claim Settlement Ratio: 98.59%
Why It's Top-Rated:HDFC Ergo combines the financial strength of HDFC with global insurance expertise. The Optima Secure plan offers exceptional value with automatic coverage doubling and comprehensive benefits without major exclusions.
Best For: Families seeking comprehensive coverage with premium features
Approximate Premium: ₹18,000-50,000 (varies by age, coverage)
2. Care Supreme
Coverage: ₹5 lakh to ₹6 croreKey Features:
100% claim settlement ratio (industry-leading)
In-house claim processing within 2 hours
11,400+ network hospitals
Worldwide coverage options
No disease-wise sub-limits
Excellent customer service reputation
Claim Settlement Ratio: 100%
Why It's Top-Rated:Care Health (formerly Religare) has achieved the remarkable distinction of 100% claim settlement, meaning every valid claim gets paid. Their swift processing and customer-centric approach make them highly reliable.
Best For: Those prioritizing claim certainty and fast processing
Approximate Premium: ₹15,000-45,000 (varies by age, coverage)
3. Niva Bupa Reassure 2.0
Coverage: ₹5 lakh to ₹1 croreKey Features:
100% claim settlement ratio
No room rent limits
Unlimited reinstatement of sum insured
Home care treatment coverage
10,000+ network hospitals
Affordable premiums
Claim Settlement Ratio: 100%
Why It's Top-Rated:Niva Bupa (formerly Max Bupa) offers excellent coverage at competitive prices. Perfect claim settlement record and comprehensive features without common exclusions make it ideal for value-conscious buyers.
Best For: Families wanting extensive protection with good affordability
Approximate Premium: ₹12,000-40,000 (varies by age, coverage)
4. Star Health Family Health Optima
Coverage: ₹3 lakh to ₹25 lakhKey Features:
99.21% claim settlement ratio
14,000+ network hospitals (largest for standalone health insurer)
Coverage for daycare procedures
Emergency domestic medical evacuation
Sum insured recharge benefit
Specialized plans for specific conditions
Claim Settlement Ratio: 99.21%
Why It's Top-Rated:Star Health is India's first standalone health insurance company with deep domain expertise. Their extensive network and specialized health-focused approach provide exceptional healthcare access.
Best For: Families prioritizing hospital accessibility and specialized care
Approximate Premium: ₹12,000-38,000 (varies by age, coverage)
5. Aditya Birla Activ Fit
Coverage: ₹2 lakh to ₹2 croreKey Features:
99.01% claim settlement ratio
Wellness coaching and health management programs
Chronic disease management support
11,000+ network hospitals
Healthy lifestyle rewards
Affordable entry-level plans
Claim Settlement Ratio: 99.01%
Why It's Top-Rated:Aditya Birla focuses on preventive health and wellness, offering coaching and management programs alongside insurance coverage. Good for those wanting holistic health support.
Best For: Health-conscious individuals seeking wellness benefits alongside coverage
Approximate Premium: ₹10,000-35,000 (varies by age, coverage)
Super Top-Up Strategy: Maximizing Coverage While Minimizing Cost
One of the smartest strategies for getting high coverage without breaking the bank is combining a base policy with a super top-up plan.
What Is a Super Top-Up Plan?
A super top-up provides additional coverage beyond your base policy, activating only after you've paid a deductible amount.
How It Works:
Base policy: ₹5 lakhSuper top-up: ₹15 lakh with ₹5 lakh deductibleTotal coverage: ₹20 lakh
If claim is ₹3 lakh:
Base policy pays: ₹3 lakh
Super top-up pays: ₹0 (below deductible)
You pay: ₹0
If claim is ₹12 lakh:
Base policy pays: ₹5 lakh
Super top-up pays: ₹7 lakh (₹12L - ₹5L deductible)
You pay: ₹0
If claim is ₹22 lakh:
Base policy pays: ₹5 lakh
Super top-up pays: ₹15 lakh (full coverage after deductible)
You pay: ₹2 lakh
Super Top-Up vs Regular Top-Up: Critical Difference
Regular Top-Up: Activates per claim
If each hospitalization is below deductible, top-up never activates
Less valuable
Super Top-Up: Calculates cumulative annual expenses
Multiple small claims get added together
Once cumulative expenses exceed deductible, coverage activates
Much more valuable
Example:
Deductible: ₹5 lakhClaim 1: ₹3 lakh (Month 3)Claim 2: ₹4 lakh (Month 9)
Regular Top-Up: Pays ₹0 (neither claim exceeds ₹5L individually)
Super Top-Up: Pays ₹2 lakh (cumulative ₹7L exceeds ₹5L deductible)
The Cost Advantage
Option 1: Direct ₹20 Lakh Policy
Annual premium: ₹35,000-45,000
Option 2: ₹5 Lakh Base + ₹15 Lakh Super Top-Up (₹5L deductible)
Base premium: ₹12,000-15,000
Super top-up premium: ₹8,000-12,000
Total: ₹20,000-27,000
Savings: ₹15,000-25,000 annually (40-50% less!)
Recommended Super Top-Up Strategy
For Young Professionals (20s-30s):
Base: ₹5 lakh
Super top-up: ₹10-15 lakh
Total coverage: ₹15-20 lakh
Combined premium: ₹15,000-20,000
For Families (30s-40s):
Base: ₹10 lakh family floater
Super top-up: ₹20-30 lakh
Total coverage: ₹30-40 lakh
Combined premium: ₹25,000-35,000
For Senior Citizens:
Base: ₹10 lakh senior citizen plan
Super top-up: ₹20 lakh
Total coverage: ₹30 lakh
Combined premium: ₹40,000-60,000
Recommendation: Super top-up is the most cost-effective way to get ₹20-50 lakh coverage.
Claim Settlement Ratio: Why It's Your Most Important Metric
Claim Settlement Ratio (CSR) tells you what percentage of claims an insurer approved and paid.
Understanding CSR
Formula: (Number of claims settled / Total claims received) × 100
Example:
Claims received: 10,000
Claims settled: 9,500
CSR: 95%
What's a Good CSR?
95%+: Excellent (very reliable)
90-95%: Good (generally trustworthy)
85-90%: Average (proceed with caution)
Below 85%: Poor (avoid)
The Step-by-Step Process to Buy Health Insurance
Now that you understand what to look for, here's how to actually buy the right policy.
Step 1: Calculate Required Coverage
Use the guidelines provided:
Minimum ₹5-10 lakh
50% of annual income
Adjust for city, age, family size
Step 2: List Essential Features
Your non-negotiables:
No room rent limits
No co-payment (unless senior citizen)
No disease-wise sub-limits
Pre & post-hospitalization (30/60 days minimum)
Daycare coverage
Restoration benefit
Low waiting periods (24 months max for pre-existing)
Step 3: Shortlist 3-5 Insurers
Based on:
CSR above 95%
Network hospitals in your city (10+ minimum)
Good reputation and financial stability
Step 4: Compare Specific Plans
Use comparison websites:
Enter your details and compare premiums and features.
Step 5: Read Policy Documents
Critical Sections to Review:
Waiting periods
Exclusions (what's not covered)
Claim process
Network hospital list
Step 6: Buy Direct or Through Advisor
Direct Purchase (Recommended):
Buy from insurer's website
Typically 10-15% cheaper than through agents
No commission markup
Through Advisor (If You Need Help):
Use IRDAI-certified advisors
Ensure they explain all terms clearly
Don't buy based on premium alone
Step 7: Disclosure Is Critical
Always Disclose:
Pre-existing conditions
Past illnesses/surgeries
Smoking/drinking habits
Family medical history
Current medications
Why: Non-disclosure can lead to claim rejection. Better to pay slightly higher premium with full disclosure than face rejected claims later.
Step 8: Keep Documents Ready
For smooth claim processing:
Policy document
Health card
Photo ID
Previous medical records (if any)
If you want someone to assist you with your investments or insurance and grow your wealth, feel free to contact us. Our team of experts will be happy to help. You can also email us at help@reymanwealth.com
Common Health Insurance Mistakes to Avoid
Mistake 1: Buying Based Only on Premium
The cheapest policy is rarely the best. Lower premiums often mean:
Higher co-payment
Room rent limits
Disease-wise sub-limits
Poor claim settlement ratio
Focus on value, not just cost.
Mistake 2: Insufficient Coverage
₹3 lakh coverage was adequate in 2010. In 2025, it's dangerously low. One serious illness will exhaust it.
Buy adequate coverage from day one.
Mistake 3: Ignoring Waiting Periods
Buying a policy with 4-year waiting period for pre-existing conditions when you have diabetes means 4 years of unprotected risk.
Compare waiting periods carefully.
Mistake 4: Not Checking Network Hospitals
Your policy might have 15,000 network hospitals nationwide, but only 2 in your city—both poor quality.
Verify local network hospital quality and quantity.
Mistake 5: Delaying Purchase
Health insurance gets more expensive with age. Every year you delay:
Premium increases 5-15%
Pre-existing conditions develop
Waiting periods start later
Buy health insurance in your 20s, even with ₹3-5 lakh coverage initially.
Mistake 6: Non-Disclosure
"I'll hide my diabetes to get lower premium" is the fastest path to claim rejection.
Full disclosure always.
Mistake 7: Not Reading Policy Document
Most people never read their policy until claim rejection. Then it's too late.
Spend 2 hours reading your policy before buying.
Mistake 8: Buying Multiple Similar Policies
Two ₹5 lakh policies don't give you ₹10 lakh coverage—they give you ₹5 lakh with two claim processes.
Better to buy one ₹10 lakh policy or ₹5L + ₹5L super top-up.
The Bottom Line:
A comprehensive health insurance policy with ₹10-20 lakh coverage costs ₹15,000-30,000 annually for most people. That's ₹1,250-2,500 per month—less than what many spend on dining out or entertainment.
That small investment protects your entire family's financial future. One hospitalization without insurance can wipe out lakhs in savings. With proper insurance, medical emergencies remain medical issues, not financial catastrophes.
Stop delaying. Stop overthinking. Use this guide, choose a policy from the top-rated options, and buy it this week. Your future self will thank you for making this decision today.
If you want someone to assist you with your investments or insurance and grow your wealth, feel free to contact us. Our team of experts will be happy to help. You can also email us at help@reymanwealth.com
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