Health insurance is a contract between you and an insurance company. You pay a yearly amount called a premium. In return, if you get hospitalised, the insurer pays your hospital bills — up to a limit called the sum insured.
The simple way to think about it
Instead of saving ₹5–10 lakh for a medical emergency (which most people can't do), you pay ₹8,000–15,000 per year. The insurer bears the risk.
How does it actually work?
There are two ways to use your health insurance when you are hospitalised:
- Cashless hospitalisation — You go to a hospital in your insurer's network. The insurer pays the hospital directly. You pay little or nothing at discharge.
- Reimbursement — You pay the hospital, save all bills, and then submit a claim to the insurer. They pay you back (minus deductions like co-payment or sub-limits).
What does health insurance cover?
- In-patient hospitalisation (admitted for more than 24 hours)
- Day care procedures (surgeries that don't need 24-hour admission — cataract, dialysis)
- Pre and post-hospitalisation expenses (usually 30–60 days before/after)
- Ambulance charges
- AYUSH treatments (Ayurveda, Yoga, Unani, Siddha, Homeopathy) — in many modern plans
- Domiciliary hospitalisation (home treatment if hospital admission is not possible)
What does it NOT cover?
- OPD visits, unless you have a specific OPD add-on
- Cosmetic surgery
- Self-inflicted injuries
- Pre-existing diseases during the waiting period (usually 2–4 years)
- Dental and vision (unless specifically added)
Key terms at a glance
| Term | What it means |
|---|---|
| Sum Insured | Maximum the insurer pays in a year (e.g. ₹10 lakh) |
| Premium | What you pay annually to keep the policy active |
| Deductible | Amount you pay out-of-pocket before insurance kicks in |
| Network Hospital | Hospitals where cashless treatment is available |
| Waiting Period | Time you must wait before certain conditions are covered |
Individual vs Family Floater
An individual plan gives each person their own separate sum insured. A family floater gives the whole family one shared pool — usually cheaper, but risky if two members face major illness in the same year.
Don't rely only on employer cover
If you change jobs or get laid off, your employer group cover disappears immediately. Always have your own personal policy.
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