How to choose health insurance in India

Room rent limit. If the policy caps the room category or the daily room charge, and you occupy a more expensive room, many policies apply a proportionate deduction across the entire bill — surgeon's fees, investigations, everything — not just the room charge. This single clause reduces more claims than any other. A policy with no room rent capping costs more and is usually worth the difference.

Co-payment. A fixed percentage of every claim that you pay yourself. Common in cheaper plans and near-universal in senior citizen products. A twenty per cent co-payment on a large hospitalisation is a large number, and it applies even when the claim is fully admissible.

Disease-wise sub-limits. Caps on named procedures — cataract, knee replacement, hernia and others — set as a rupee figure or a percentage of sum insured. A policy with a headline sum insured of ten lakh and a cataract sub-limit is not offering ten lakh for cataract.

Pre-existing disease waiting period. The number of months before conditions you already had are covered. This runs from the first day of the first policy, and it is the main reason to buy early rather than when you need it.

Specific waiting periods for listed conditions and procedures, and the initial waiting period for any illness other than accident. Read the list; it is longer than people expect.

Non-payable items. Consumables, gloves, syringes, administrative charges and dozens of other items are excluded as standard and typically account for a meaningful share of a hospital bill. Some insurers sell a consumables rider that closes this gap.

Restoration or refill of sum insured within a policy year, and whether it applies to the same illness or only to an unrelated one. This is the difference between a policy that covers one serious event and one that covers two.

Start from what a serious hospitalisation costs in the city you live in, not from a rule of thumb. Cardiac, oncology and neurosurgery admissions in a metro private hospital are the events that exhaust a policy, and their cost bears no relation to what routine treatment costs.

A family floater covers everyone from one pool, which is cheaper and works well while the family is young and healthy. Its weakness is arithmetic: one serious claim can exhaust the pool for everyone else that year. Individual policies for each adult cost more and remove that risk.

Parents are usually better insured separately. Adding older parents to a floater raises the premium for everyone, because floater pricing is driven by the eldest member, and senior citizen products with their own co-payment and sub-limits are often a better structure than a shared pool.

Employer cover is not a substitute. It ends when the job does, it usually cannot be ported into an individual policy on the same terms, and by the time you leave you may be older and have conditions that make fresh cover expensive or unavailable. Hold a personal policy alongside it, so that its waiting periods are running while you are still employed.

A super top-up is the cheapest way to buy a large amount of cover. It pays above a deductible that you meet from the base policy or your own pocket, and because it only engages on large claims it is priced far below a base policy of the same size. A modest base policy plus a large super top-up is usually better value than one very large base policy.

If you have any government scheme entitlement, check it before buying private cover, because it changes what you need to fill rather than replacing the decision entirely.

Disclose everything at the proposal stage — every diagnosis, every medication, every hospitalisation, in every family member being covered. Non-disclosure is the single largest cause of rejected claims, and it does not have to be deliberate. A condition found later in your own hospital records is enough.

Fill the proposal form yourself. If an agent fills it for you, read every answer before signing. The form is the basis of the contract and you are bound by what is on it, not by what you told the agent.

Ask for the full policy wording before paying, not the brochure. The brochure is marketing; the wording is the contract. If the seller cannot produce it, that is your answer.

Check whether the hospitals you would actually use are in the insurer's cashless network, and understand that networks change. Cashless is the difference between the insurer carrying the money and you carrying it.

Look at the standard product as a baseline. The regulator requires insurers to offer standardised health products with identical wording, so pricing them against a proprietary plan tells you what you are paying extra for.

Use the free look period. After the policy document arrives you have a minimum of fifteen days to read it and cancel for a refund of premium less proportionate risk and expenses. This is the only point at which reading the wording is costless.

Set the renewal date somewhere you will not forget it. A lapsed health policy usually restarts the waiting periods, which is the most expensive administrative mistake available in this product.

Keep the proposal form, the policy schedule and every endorsement together. At claim time the insurer works from those documents and so should you.

The regulator publishes sector data and the insurers publish their own disclosures. Claim settlement performance, complaint volumes and grievance disposal are the numbers that tell you how the contract behaves in practice.

Check the grievance route before you need it. Every insurer must have a grievance redressal officer whose details are in the policy document, and must respond within the regulatory timeline. If you cannot find that name and address in the document you were given, the document is incomplete.

Above the insurer sits the regulator's own complaint portal and helpline, which do not adjudicate but create a regulatory record and frequently produce movement on a stuck claim.

Above that sits the Insurance Ombudsman: free, no lawyer required, covers disputes up to a prescribed limit, and its award binds the insurer while leaving you free to go elsewhere if you reject it. It is the strongest and least-used remedy in Indian insurance, and its existence should influence which insurer you pick — because an insurer that knows a binding forum is available behaves differently from one that does not.

Portability exists precisely so that a bad experience is not permanent. You can move to another insurer at renewal and carry your accrued waiting periods with you, provided you apply within the window before renewal. Insurers can decline to accept a port, but they cannot make you stay.

Finally, judge the intermediary as well as the insurer. A broker or agent who tells you a pre-existing condition is 'not worth mentioning' is arranging your claim rejection several years in advance, and the fact that they said it will not help you.

Health insurance premium attracts a deduction under the income tax rules, with separate limits for yourself and your family and for parents, and higher limits where the insured is a senior citizen. The limits and the treatment differ between tax regimes, so confirm the position for the regime you are in before treating the deduction as part of the value.

Critical illness cover is a different product. It pays a lump sum on diagnosis of a listed condition, regardless of hospital bills, and it has its own definitions and survival period. It is not a substitute for indemnity health cover and should be bought, if at all, as a separate decision about income replacement.

Personal accident cover is cheap and frequently more useful than an additional lakh of health cover, because it pays on death or disability rather than on treatment.

Maternity cover has long waiting periods and is priced accordingly. If you buy it, buy it years ahead of needing it; buying it in the year you plan a pregnancy achieves nothing.

Riders that reduce your room rent restriction, cover consumables or waive co-payment are often better value than the same money spent on a higher sum insured, because they attack the deductions that apply to every claim.

What people over-buy is sum insured, wellness add-ons and multi-year discounts that lock them into a policy they have not yet tested. What they under-buy is a policy without a room rent cap, a super top-up, and cover for their parents bought while their parents were still insurable.