Health Insurance Planning: What COVID Taught Us About Getting Covered

Last Updated on April 22, 2026 by Hemant Beniwal

“An ounce of prevention is worth a pound of cure.” – Benjamin Franklin

In August 2020, I received more calls about health insurance than in any previous year of my practice. Clients who had ignored their health cover for years were suddenly asking urgent questions. Some had inadequate coverage – family floaters with Rs 3-5 lakh sum insured that would barely cover a week in a private hospital with a serious illness. Others had none at all.

The COVID-19 pandemic did something that no amount of financial planning advice had managed: it made health insurance a felt need rather than an abstract obligation. People who had spent years deferring the decision to “next year” suddenly understood viscerally why comprehensive health cover is not optional.

The COVID-specific insurance products – Corona Kavach and Corona Rakshak – were short-tenure policies introduced by IRDAI in 2020 to provide emergency coverage during the pandemic. Both schemes have since been discontinued as COVID management improved and regular health insurance policies began covering COVID-related hospitalisation as standard.

What remains relevant is the underlying lesson: waiting until you need health insurance to buy it is the most expensive mistake in personal finance.

Why Most Indian Health Insurance Cover Is Inadequate

Three coverage problems are common in client portfolios.

Relying solely on employer group cover. Corporate health insurance is a valuable benefit but it is not sufficient as your only health cover. It covers you only while employed – a job change, layoff, or early retirement creates a gap. The coverage limit is typically Rs 3-5 lakh, which is inadequate for a serious hospitalisation in a private hospital in any major city. And family members are often inadequately covered or excluded.

Insufficient sum insured. A Rs 5 lakh family floater for a family of four in Delhi or Mumbai in 2025 is genuinely inadequate. A single major surgery – cardiac bypass, joint replacement, cancer treatment – can easily cost Rs 8-15 lakh. A week in an ICU at a private tertiary care hospital can exceed Rs 3-5 lakh. The sum insured set 10 years ago needs revisiting – medical inflation in India runs at 10-15% annually, significantly above general CPI.

Disease-specific plans substituting for comprehensive cover. Critical illness riders, cancer-specific plans, and similar products serve a purpose but should sit on top of comprehensive health insurance, not replace it. They pay a lump sum on diagnosis of a defined condition – but they do not cover the full range of conditions that result in hospitalisation.

“The COVID pandemic created genuine awareness around health insurance, but many families then bought minimum-compliant plans and moved on. What they needed was not a Rs 5 lakh COVID plan – it was a properly sized comprehensive health cover that would protect them from the full range of medical emergencies, not just one.”

– Hemant Beniwal, CFP, CTEP | Founder, RetireWise

How Much Health Cover Do You Actually Need?

A commonly used framework: your health insurance cover should be approximately 50% of your annual income, with a minimum floor of Rs 10 lakh per adult in Tier 1/2 cities. For a family of four in a major city, Rs 20-25 lakh in family floater cover – or individual policies of Rs 10-15 lakh each – is a reasonable starting point.

This seems expensive until you price a significant medical event. A coronary bypass surgery in a reputed private hospital in Delhi or Mumbai costs Rs 4-8 lakh. Cancer treatment can run Rs 10-30 lakh or more depending on the cancer type and treatment protocol. A road accident requiring multiple surgeries, ICU time, and rehabilitation can easily exceed Rs 15 lakh.

The solution to high premium on a large sum insured: use a base plan with a lower sum insured (Rs 5-10 lakh) combined with a super top-up plan that kicks in above the base. Super top-up plans offer very high coverage (Rs 20-50 lakh additional) at a fraction of the premium of a comparable base plan. The base plan handles routine hospitalisations; the top-up handles catastrophic events.

Key Features to Evaluate When Choosing a Health Plan

Claim settlement ratio. IRDAI publishes annual claim settlement ratios for all health insurers. Choose companies with ratios consistently above 90%. A plan that is difficult to claim on defeats its purpose.

Network hospital coverage. Cashless hospitalisation is only available at network hospitals. Verify that the top private hospitals in your city are on the insurer’s network before buying. A policy with poor network coverage means reimbursement claims, which add stress and delay during a medical crisis.

Pre-existing disease waiting period. Most health plans exclude pre-existing conditions for a 2-4 year waiting period after policy issuance. Buy early, before these conditions develop. Once you have diabetes, hypertension, or other chronic conditions, the waiting period exclusion becomes a significant coverage gap that is difficult to close.

No-claim bonus. Most plans offer sum insured enhancement for each claim-free year. Over 5-10 years of no claims, this meaningfully increases your cover without corresponding premium increases.

Restore/recharge benefit. Some plans restore the sum insured if it is fully exhausted within a policy year – useful for families where multiple members might need hospitalisation in the same year.

What COVID Taught Us About Health Insurance Planning

The pandemic’s most lasting financial lesson was not about which specific insurance product to buy. It was about timing and comprehensiveness. People who had bought comprehensive health insurance when they were healthy, young, and before pre-existing conditions developed were protected. Those who had deferred or under-insured faced the worst of two options: either paying large out-of-pocket amounts during the crisis, or attempting to buy insurance mid-pandemic when insurers had tightened underwriting standards and introduced higher premiums and exclusions.

The decision window for comprehensive health insurance at the best terms is now, while you are healthy. Every year of deferral increases the probability of a pre-existing condition developing – which either makes coverage more expensive or adds a waiting period exclusion.

Read – How to Select the Right Health Insurance Cover

Read – How Much Health Insurance Do I Need?

Frequently Asked Questions

Should I keep my employer group health cover or buy individual cover?

Both. Never rely solely on employer cover for the reasons above – employment changes create coverage gaps at the worst possible times. Buy your own individual or family floater policy now and keep it continuously renewed regardless of employment status. Treat employer cover as a welcome supplement that reduces your out-of-pocket exposure but not as your primary protection.

At what age is it still reasonable to buy new health insurance?

Most health insurers issue new policies up to age 65 and some up to 75, but premiums increase substantially with age and underwriting scrutiny rises. More importantly, if you have developed diabetes, hypertension, heart disease, or other chronic conditions, these will carry waiting period exclusions or may result in policy loading (higher premium) or outright exclusion from the policy. The practical answer: buy before 40, ideally before 35, to get the best rates and widest coverage. After 50, it becomes increasingly difficult and expensive to get genuinely comprehensive cover.

Is it worth buying a top-up or super top-up over my existing cover?

Almost always yes. A Rs 50 lakh super top-up with a Rs 10 lakh deductible for a family of four typically costs Rs 8,000-15,000 annually – a fraction of what a base plan with Rs 50 lakh sum insured would cost. If your existing base plan (corporate or individual) provides Rs 5-10 lakh coverage, a super top-up above that threshold protects you from catastrophic medical events at very reasonable cost. It is the most cost-efficient way to significantly increase your health cover.

The COVID-19 period made health insurance visible in a way that routine advice never had. The lesson was not new – advisors have been saying “buy comprehensive health insurance early” for decades. The pandemic simply made the consequences of ignoring that advice impossible to overlook. Do not wait for the next medical emergency to take your health cover seriously.

Comprehensive health cover. Adequate sum insured. Started early. These three things.