How to Select Your Health Insurance in India – Complete Guide with Examples

Health insurance in India is no longer a luxury — it’s a necessity. With rising medical costs, even a short hospital stay can burn a huge hole in your pocket. Choosing the right health insurance plan is critical to ensure that you and your family get quality treatment without financial stress.

In this detailed guide, we’ll cover everything Indian buyers must check before buying health insurance and walk you through step-by-step filters using Policybazaar as an example.

1. Why Health Insurance is Essential in India

• Medical inflation in India is increasing by 12–14% every year.
• A single heart surgery can cost ₹2–5 lakhs in private hospitals.
• Even basic hospitalization for 4–5 days can cost ₹60,000–₹1,50,000.
• Lifestyle diseases like diabetes and hypertension are affecting younger people.

Without insurance, you either use your savings or take loans — both of which can delay treatment and increase stress.

2. Types of Health Insurance Plans in India

Before you start comparing, understand the common categories:

3. Mandatory Filters When Selecting a Plan in India

When you use online portals like Policybazaar, Coverfox, or Turtlemint, apply these filters first to shortlist the right plans:

Filter 1 – Coverage Type

• Individual if only for you
• Family Floater if covering spouse, kids, parents
  ✅ Example: If you have a family of 4, select Family Floater → “Self + Spouse + 2 Children”

Filter 2 – Sum Insured

• For metros (Delhi, Mumbai, Bengaluru, Chennai): ₹10–15 lakh minimum
• For smaller cities: ₹5–10 lakh
  ✅ Example: A family in Chennai with two kids should select ₹10 lakh Family Floater to cover possible heart surgery or ICU stay.

Filter 3 – Age of Members

• Higher age = higher premium
• Senior citizens require special plans
  ✅ Example: If parents are 65+, add them separately in a senior citizen plan instead of clubbing them with your family floater.

Filter 4 – Network Hospitals

• Ensure the insurer has cashless hospitals near your home/work.
  ✅ Example: On Policybazaar, filter by “Cashless Hospitals Near Me” → Enter your pin code.

Filter 5 – Pre-Existing Disease Waiting Period

• For younger buyers: 2–3 years waiting period is fine
• For older buyers: Choose the shortest waiting period possible
  ✅ Example: If you have diabetes, a policy with 2 years waiting period is better than one with 4 years.

Filter 6 – Room Rent Limit

• Prefer No Room Rent Limit or at least Single Private AC Room coverage.
  ✅ Example: A plan with ₹5,000/day room limit may force you to downgrade to a general ward.

Filter 7 – Co-Payment Clause

• Avoid co-payment if possible.
• If unavoidable, keep it ≤10%.
  ✅ Example: For a ₹2 lakh bill with 20% co-pay, you will still pay ₹40,000 from your pocket.

Filter 8 – Claim Settlement Ratio (CSR)

• Choose insurers with CSR above 95%.
  ✅ Example: HDFC Ergo – 97%, Care Health – 95%, Star Health – 99% (2024 data).

Filter 9 – No-Claim Bonus

• Plans offering 50–100% increase in coverage for claim-free years are ideal.
  ✅ Example: ₹10 lakh cover → after 2 years without claims, it becomes ₹15–20 lakh.

Filter 10 – Add-ons

Look for:

• OPD coverage
• Maternity benefits
• Annual health check-ups
• Alternative treatments (AYUSH)
• Worldwide coverage

4. Step-by-Step Example Using Policybazaar

Let’s say you are a 35-year-old from Chennai, with a spouse (32) and one child (5 years old). Here’s how you can find a suitable plan:

1. Go to Policybazaar.com
2. Enter details:
   • Self: 35 years
   • Spouse: 32 years
   • Child: 5 years
3. Select Family Floater
4. Filter sum insured: ₹10 lakh
5. Filter waiting period: ≤ 3 years
6. Select room type: Single Private AC Room / No Limit
7. Exclude co-payment: Select “No Co-Payment”
8. Check network hospitals in Chennai
9. Sort by Claim Settlement Ratio (High to Low)
10. Compare top 3 plans and read exclusions.

✅ Example Final Shortlist:

• HDFC Ergo Optima Restore – ₹10 lakh – No Room Rent Limit – CSR 97%
• Niva Bupa Health Companion – ₹10 lakh – ₹20,000/day room rent – CSR 96%
• Care Health Care Supreme – ₹10 lakh – Free Health Check-up – CSR 95%

5. Common Mistakes Indians Make When Buying Health Insurance

• Choosing only based on premium – Cheap plans often have high restrictions.
• Not reading exclusions – Some plans exclude expensive treatments like robotic surgery.
• Including parents in the same floater – This increases premium for everyone.
• Buying too late – Waiting periods start only after buying, so buy early.

6. Final Checklist Before You Buy

✅ Coverage matches city medical costs
✅ CSR > 95%
✅ No room rent cap / Single Private Room
✅ Pre-existing waiting period ≤ 3 years
✅ Network hospitals near you
✅ No co-payment or ≤ 10%
✅ Good No-Claim Bonus benefits

Conclusion

Selecting the right health insurance in India is about matching your needs with the right features, not just finding the cheapest premium. Use filters on comparison sites like Policybazaar, Coverfox, or Turtlemint to narrow down your choices. Then, read the fine print before buying.

Remember — the best time to buy health insurance is NOW, before you actually need it.