Health insurance: why you need your own policy

What one hospital bill does to your savings

Priya is 30 and has saved ₹6 lakh over five years. Her father needs surgery, and the bill comes to ₹5 lakh. With no insurance, five years of saving are gone in a week.

The real cost is bigger. Left invested for 20 years at 12% a year, that ₹5 lakh would have grown to about ₹48 lakh. A health policy turns a large, sudden bill into a small yearly premium you can plan for.

Medical costs keep rising

Hospital costs in India have been rising much faster than prices in general: recent industry estimates put medical inflation at around 12% to 14% a year. At 12%, a treatment that costs ₹5 lakh today would cost:

So cover that looks generous today will look small in ten years. Choose more than you think you need now, and use the no-claim bonus and a super top-up to keep up.

Why office cover is not enough

• It ends with the job. If you resign, are laid off or retire, the cover stops, often just when you are older and more likely to claim.
• It is often small, a few lakh rupees shared by the whole family.
• Waiting periods start again. A policy you buy later can exclude illnesses you already have, such as diabetes or blood pressure, for up to 3 years.
• Your employer sets the terms and can change them each year.

Arjun has ₹5 lakh of family cover from his office. At 45 he is found to have diabetes, and a year later his company cuts jobs. He can still buy a policy, but the insurer may charge more, exclude diabetes-related claims for up to 3 years, or both. Had he bought his own policy at 30, it would cover his diabetes like any other illness.

Keep your office cover as well. The ideal is office cover plus a policy of your own, so you are never without one.

How much cover to buy

There is no single right number, but these are sensible starting points for a policy of your own, in addition to any office cover:

A super top-up is the cheapest way to get large cover. It pays only once your bills in a year cross a set amount, the deductible, which your base policy pays. With a ₹10 lakh base policy and a ₹50 lakh super top-up with a ₹10 lakh deductible, a ₹25 lakh bill is paid ₹10 lakh by the base policy and ₹15 lakh by the super top-up.

Pick a super top-up rather than a plain top-up. A plain top-up applies the deductible to each claim, so two ₹8 lakh bills in a year with a ₹5 lakh deductible leave you paying ₹5 lakh of the second one once the base policy runs out. A super top-up adds up all the bills in the year and pays the whole second bill.

What to check before you buy

• Room rent limit. If the policy caps the room at, say, 1% of cover a day and you take a costlier room, many insurers cut other charges in the same proportion. Prefer no room rent limit.
• Co-payment. A 20% co-pay means you pay a fifth of every bill. Common in senior citizens’ policies; avoid it if you can.
• Limits on particular treatments, such as cataract or knee replacement.
• Waiting periods for illnesses you already have (3 years at most) and for listed conditions.
• Restoration, which refills the cover if you use it up in a year, and the no-claim bonus, which raises it each year you do not claim.
• Hospitals near you in the insurer’s cashless network.
• Day-care treatments, and costs before and after the hospital stay.

Rules that now protect you

IRDAI’s rules from 2024 tilt things towards policyholders:

• No upper age limit: insurers must offer policies for people of every age, including those over 65.
• The wait for pre-existing illnesses is at most 3 years.
• After 5 years of continuous cover (the moratorium), a claim cannot be refused for something you did not disclose, except for fraud.
• The insurer must decide a cashless request within 1 hour, and approve discharge within 3 hours.
• You can port your policy to another insurer and keep the waiting-period credit you have built up.
• You have 30 days after receiving a new policy to cancel it and get a refund.

Premiums for individual and family policies carry no GST since 22 September 2025. If an insurer rejects a claim unfairly, complain to it first, then to the Insurance Ombudsman, which costs nothing.

Cover for your parents

• Buy parents a separate policy rather than adding them to your family floater: a floater’s premium follows the oldest member, and one big claim for them can use up your family’s cover.
• Everyone 70 or older can get ₹5 lakh a year of free hospital cover at empanelled hospitals through the Ayushman Vay Vandana card under Ayushman Bharat PM-JAY, whatever their income.
• Premiums you pay for your parents give an extra deduction of up to ₹50,000 in the old regime. See Section 80D explained.