Last Updated on April 23, 2026 by teamtfl
A client of mine went through a medical emergency last year. His father, 68 years old, needed bypass surgery. The total cost came to Rs. 9.5 lakh. He had a family floater policy for Rs. 5 lakh, which he had not upgraded in eight years despite his father crossing 60.
The remaining Rs. 4.5 lakh came from his retirement savings. Eight years of SIP contributions, wiped out in one hospitalization.
This is the story of health insurance in India. Most people have it. Very few have enough of it.
Quick Answer
A mediclaim or health insurance policy covers hospitalization costs including room rent, surgery, medicines, and pre and post hospitalization expenses. Medical inflation in India runs at roughly 14% per year. The right policy, the right sum assured, and understanding what is and is not covered can be the difference between a medical emergency and a financial catastrophe.
Why Health Insurance Has Become Non-Negotiable
Medical costs in India are rising at roughly 14% per year, which means they double every five years. A surgery that cost Rs. 3 lakh in 2015 costs Rs. 8 to 10 lakh today. A week in a private ICU in a metro city can easily cross Rs. 5 lakh before surgery or specialist fees.
Yet most people still carry health cover that was adequate in 2010. Their Rs. 3 lakh family floater made sense at 30. At 50, with ageing parents and a teenager heading to college, it is dangerously inadequate.
One serious hospitalization without adequate cover can destroy a decade of savings. Health insurance premiums, even for Rs. 10 to 15 lakh cover, are a small fraction of what a single unplanned hospitalization costs.
What a Mediclaim Policy Actually Covers
A standard health insurance policy covers costs during hospitalization, provided you are admitted for more than 24 hours. Main expenses covered: room rent, ICU charges, surgeon and doctor fees, medicines, nursing charges, and ambulance costs.
Most policies also cover:
- Pre-hospitalization expenses: typically 30 to 60 days before admission, for the same illness
- Post-hospitalization expenses: typically 60 to 90 days after discharge, for the same illness
- Day care procedures: treatments that do not require 24-hour admission due to medical advances
What is typically NOT covered: pre-existing diseases during the waiting period (usually 2 to 4 years), cosmetic procedures, dental treatment unless due to an accident, and self-inflicted injuries.
The waiting period is the detail most people discover too late. If you buy health insurance at 52 and are diagnosed with diabetes at 53, that condition will likely not be covered for 2 to 4 years. This is why buying health insurance early matters enormously.
Individual Policy vs Family Floater
An individual policy gives each family member their own sum assured. One person falling ill does not reduce another member’s cover.
A family floater gives one shared sum assured for the entire family. Cost-efficient for younger healthy families, but risky when elderly parents are included. If your father uses Rs. 10 lakh of a Rs. 15 lakh floater for surgery, only Rs. 5 lakh remains for the rest of the family for that year.
One important rule: do not include parents above 60 in a family floater that also covers younger members. Their higher risk profile drives up the premium and their claim can exhaust cover for everyone else. Get a separate senior citizen policy for parents.
Something Worth Noticing
The biggest mistake I see in client portfolios is not the absence of health insurance but the absence of adequate health insurance. A Rs. 3 lakh policy in 2026 is like wearing a raincoat with holes. You feel protected. You are not. Review your sum assured every three years and increase it as medical costs rise around you.
How Much Cover Is Actually Enough?
In a metro city with private hospital preference, the minimum sum assured for an individual today should be Rs. 10 lakh. For a family of four, a floater of Rs. 15 to 20 lakh is a realistic starting point. Parents above 60 need at least Rs. 10 lakh cover separately.
A super top-up policy is the most efficient way to increase total cover without paying high premiums on the base policy. Keep a base policy of Rs. 5 lakh and add a Rs. 20 lakh super top-up with a Rs. 5 lakh deductible. The super top-up activates once hospitalization costs exceed Rs. 5 lakh in a year. The premium for this structure is significantly lower than a Rs. 25 lakh standalone base policy.
The Cashless vs Reimbursement Claim Process
Most health insurers work through a Third Party Administrator or TPA for claims processing. When you take a policy, you receive a TPA card. Present this at the time of admission.
For cashless claims, you must be admitted to a hospital on the insurer’s network list. The TPA pre-authorizes treatment and pays the hospital directly. You do not need to arrange cash upfront.
For reimbursement claims, you pay hospital bills yourself and apply to the insurer with original documents afterward. This applies at non-network hospitals or in emergencies where cashless was not arranged in time.
Common reasons claims get rejected: non-network hospital, treatment falls under a policy exclusion, insurer not informed within required timeframe after admission, or incomplete documentation. Keep the insurer helpline number saved before you ever need it.
Section 80D: The Tax Benefit Most People Under-Claim
Health insurance premiums qualify for deduction under Section 80D of the Income Tax Act. Current limits for FY 2025-26 under the old tax regime:
- Up to Rs. 25,000 for yourself, spouse, and dependent children
- Up to Rs. 50,000 if any insured member in this group is a senior citizen (60 or above)
- Up to Rs. 25,000 additionally for parents below 60, or Rs. 50,000 if parents are senior citizens
- Maximum combined deduction of Rs. 1 lakh if both self and parents qualify as senior citizens
- Up to Rs. 5,000 within these limits for preventive health check-ups
Important: these benefits are only available under the old tax regime. Under the new regime, Section 80D deductions do not apply.
What to Check Before Buying Any Policy
- Room rent sub-limit: some policies cap room rent at 1% of sum assured per day, leaving you to pay the difference at premium hospitals
- Disease-specific sub-limits: some older policies cap certain surgeries at fixed amounts far below actual costs today
- Restoration benefit: refills the sum assured for subsequent claims in the same year after one claim exhausts it
- No Claim Bonus: increases sum assured for claim-free years, typically 5 to 50% cumulatively
- Lifelong renewability: always choose a policy that guarantees renewal for life, not just up to age 65 or 70
The Retirement Planning Connection Most People Miss
When you retire at 60, your employer’s group health cover disappears on your last working day. Getting a new individual policy at 60 with pre-existing conditions is expensive and difficult. The solution is to maintain a continuous personal health policy throughout your working years, building continuity benefit, so that by retirement you have adequate cover that cannot be refused.
Medical expenses are the single biggest destroyer of retirement corpora in India. Not market crashes. Not inflation. Medical costs without adequate cover.
Buying adequate health insurance at 40 costs a fraction of what it costs at 60. The continuity benefit that covers pre-existing conditions after a waiting period only builds if you hold the policy without a break. Every year you delay is a hidden cost you will only see when you actually need the cover.
Is Your Health Cover Retirement-Ready?
Most people approaching 55 or 60 discover their health insurance has not kept pace with medical costs or their changing family needs. We review health cover as part of every retirement plan we build. If you want an honest look at whether your current cover will hold up, let us talk.
Before You Go
Related reading: Health Insurance Portability in India and What Is a Family Floater Health Insurance Policy?
Have you ever had a health insurance claim rejected or a gap in cover that cost you? Share what happened in the comments below.
One question for you: When did you last review your health insurance sum assured? If the answer is more than three years ago, this is a good week to fix that.
Great. Sir plz tell me what are those expenses that could be in policy cover. And if I will consult my home physician. That cost and pathological test could be in policy or not.
I for all time emailed this website post page to all my associates, as if like to read it after that my links will too.
sir i was covered under group mediclaim of national insurance company more then 19 years, ie till 2012 under family floater scheme of 4.0 lacs from 2008. I increased this amount after 50 years of age . will it cover chronic disease . I have already claimed under 4.0 lac coverage for the same chronic disease when i was under corporate. Now I have covered under individual policies of 5.0 laks each
hello,
I have mediclaim from new India assurance for me & my wife. My wife meet with accident which required operation. Opposite party which caused this accident paid part of my medical expenses and have taken a written note on stamp paper regarding this payment. Now my question is what part of this medical expense can i claim? can I claim the entire medical expense or the part that I have paid?
Hi Vinayak,
Any health insurance will reimburse expenses related to Hospitalization only. So you can claim from the insurance company what you paid to hospital for your wife treatment. The company will look into the claim with respect to their limitations, if any, in the policy and then will reimburse the amount as per their policy terms and conditions.
Thanks for the article !!
Sir/Madam,
I am aged 48 years and my wife is 42 years and daughter is 18 years. I would like to know which policy is the best for me ????
Hi Saravanan,
You can look towards a family floater covering three members. Apollo Munich, Max Bhupa, Religare Health are some companies you can consider. Which product you should buy will rest on which one matches your requirement. You can analyze them and consider the most viable one.
nobody talks of exclusion. whenever u buy see for excluded procedure as well. agent will never tell u. even there website will not be having exclusion list
i want to know how a person having 2 mediclaim policies claim reimbursement manually.
Hi Joy,
You will have to submit documents related to the medical treatment with both the companies. Once the documents are submitted the companies will decide on the claim amount. The information on procedure and list of document to be submitted you can get by informing the TPA/Company.
Hey Hemant,
What amount of medical cover would you suggest for a family of 3 – husband 35 yrs, wife 32 yrs, child 1 yr. Family annual income Rs. 4.5 lakhs.
Please advise.
Regards, Nishi
Hi Nishi,
There is no specific criteria but you can evaluate the coverage amount on the basis of city you are living in as the cost of treatment in bigger cities will be higher. For e.g. in a metro city for your family size any cover less than Rs 5 lakh may not be adequate. Take a view of the cost of medical treatment in your preferred hospital and take a decision accordingly.
I am 29 years old doctor and residing at Arunachal Pradesh.I want to cover myself and my parents for health insurance.As you have suggested that Apollo munich for the health insurance,I am confused if I will be able to make a claim since we will be availing the local hospitals in the area for the health care.Could you please suggest me which health policy should I opt for.ICICI lombard,jeevan Arogya,national Insurance or any other which would be available in the north east India?
Hi Kaling,
Best way for you will reaching the finest hospital in your area & asking their preference. (but remember their preference can change in future)
I am looking for an insurance agent who can help me with all my general insurance needs (medical, accident & disability, home, car & 2 wheeler).
National Insurance Co agents preferred.
Hi Sumant,
You can search in Just Dial for your city.
Hi,
Im having corporate insurance policy from my company.
My baby was born on Aug6th and since then hospitalized till yesterday. 29th Sep 2011
Expenses incurred were 5.09lacs.
My policy year was from
Sep1st 2010 to Aug31st 2011 — with IFFCO TOKIA (TPA – MEDIASSIT)
Sep1st2011 to Aug31st2012 — with UNITED INDIA INSURANCE (TPA – MEDIASSIST)
I have already availed for cashless facility with IFFCO Tokia thro MEDIASSIT but as the expenses more than double of my insured sum, I still need to reimburse for the 3.5lacs or the expenses from Sep1st to till discharge on 29th Sep2011 from UnitedIndiaInsurance??
In that case could you please let me know the process for the same.
But my TPA is saying its not possible to reimburse, but i have read online that its possible, so now they want references to such documentation. Could you please point me to some of such
Thanks
kumar
I have a Mediclaim policy with National Insurance Company which offers cover for individual family members. I have taken different amounts for different members of the family and has been steadily increasing. This policy has some sub limits such as 50% for Medicines for one illness, and other minor break up for Doctor fees, amblance, room rent etc. There are no separate sub limit for Pre and Post hospitalisation expenses.
I also have a Family floater for Rs. 5 Lakhs from Star Health and Allied Insurance Co. In this policy the restriction is a maximum of Rs. 5000 for post hospitalisation.
If I have to make a claim, what is the procedure. Assuming I make use of the Family Floater for Hospitalisation benefits (since there are no sub limits for medicines), can I use the National Ins. Co., Mediclaim policy for post hospitalisation benefits for which there are no sub limits (in case the expenses breach Rs. 5000/- limit as stipulated by Star Health.
How do I do the paper work since the TPA for National Insurance does a shabby work and irresponsible. Kindly guide me.
Regards
Srinivasan
In medical policies, one has to take care that if your policy is new, you might face problem in getting your claim approved as they will check whether your disease is pre existing or not, and you might not get the claim if your documents proof the disease was pre existing!!!
Hemant ji,
Pl suggest me can i will taken LIC’s Jeevan Arogya policy?
If no why if yes why pl give me the details.
Kiran
Hi Kiran,
Read this article to know about LIC Jeevan Arogya
https://www.retirewise.in/2011/06/lic-jeevan-arogya.html
Hi this is jegan mohan and my age is 35 and my brother is 33 we would like to take a individual poolicy but we are cofused whether to take health insurance or medical insurance , we are planing to take from Reliance please advise us.Waiting for your reply.
Hi Hemant
I am quite new to the blog and was going around through the archives and found many good info. i got convinced of the need of a medical insurance and term insurance (though an NRI of 38 yrs) and is finding out the best for me. appreciate to know your view on ICICI lombard vs Appolo munich fpr the medical insurance and Kotak e preffered vs Aegon Religare life insurance.
Thanks in advance and all the best to the best services you to continue
Shinu
Hi Shinu,
It’s good that you got convinced that there is importance of insurance in once life. As you mentioned you are an NRI my suggestion will be that you should buy it in country where you are residing. But for other readers I have found that Apollo Munich policy features are better & also serving better in comparison to ICICI Lombard. No coming to your life insurance question – yes you should buy a term plan from India. If we compare the cost of Kotak e-preferred to Aegon Religare – it’s almost same but if we talk about claim settlement Kotak wins the bout.
Hello Hemant,
I have taken Oriental Health’s family floater plan, which includes my parents. My father, at 63, is a senior citizen. I am paying a premium of INR 28000. However, my CA has told that only INR 20000 (INR 15000 for me plus additional INR 5000 since my father is a senior citizen) is available for tax benefit. Is that so? Wouldn’t the amount eligible for exemption INR 30000 in this case – INR 15000 for my immediate family and another 15000 for my parents? Kindly clarify.
Hi Sumeet,
Yes you can take this benefit – maximum benefit that can be taken is Rs 40000.(20000*2)
HEMANT PLZ TELL ME IF HE IS PAYING 28,000 PREMIUM . HOW CAN HE AVAIL BENEFIT OF SAY RS. 35,000 OR 40,0000?
Hemant ji
Can you guide me which is the best mediclaim policy currently in India in terms of claim settlement ratio . Further myself (37 yrs) , my wife (36yrs) & 01 child(3 yrs) to be insured for life . which insurance company – Govt / private can be applied keeping in view for long term – 40 yrs ( should be reliable & covers maximum benefits & have good track record)
Hi Aditya,
Nothing is best in this world – if it is best today may have chance to be worst tomorrow. So best should not be the criteria of choosing any financial product.
You can check Apollo Munich.
Best mediclaim policy 2011 India
Hi Rohit,
Choice of policy depends on once requirement but I found Apollo Munich scoring good on few criteria.
Hemant
Are there any mediclaim policy which will give us any returns apart from tax savings & medical cover.
Every mediclaim policy provides tax benefit. There are few Health Insurance products from life insurance cos that matches your second requirement like ICICI Pru health saver. But actually these are very expensive & complex products – I will suggest go for simple vanilla floater mediclaim policies.
Hemant Ji Please Help
Presently I am at the age of 46 male. Since 44, I own a mediclaim policy of “The new India Assurance company Ltd”. I had been insured till 31/03/2010 under that policy. I forgot to renew the same before 31/03/2010 and when I contacted the branch manager on 01/04/2010 he refused to renew the same and said there is no grace period. In the document of the same insurance company I have seen the content mentioning that the company has right to reject the renewal at any point of time. Presently I am free from any ailment but I feel in due course of time in my later age I may need medical assistance as usual for that I wish to purchase a medical insurance policy and keep on renewing the same till my death. Please advise me a medical insurance policy that:
1. Can not refuse renewal of the policy after some years when I will have entered in 50s. Because if I purchase a policy from some company at the age of 46 than to which company I will go to at my latter age.
2. Offer lowest premium with highest sum assured.
3. The offering company is most reputed for their claim settlements.
4. The offering company is reputed for there honesty.
Hi Vipin,
It is quite unfortunate to learn what happened with your mediclaim policy as the new India Assurance company Ltd is the only PSU general insurance company that does now allow a grace period. The two companies that offer guaranteed renewal for life are Apollo Munich and Max Bupa. Of course these are not the most economical on premium but certainly, Apollo Munich does match all points that you have raised including renewal, comparatively lower premium & good claim settlement. Honesty is a very subjective thing & can’t be determined as such. In case any adverse medical condition develops at a later date, you becomes a bad risk for the company, they will certainly load your premium but they will never refuse your right to renew. My suggestion is go for Apollo Munich their claim settlement ratio & other processes are good. Max Bupa is new in Market & even premiums are on higher side.
My age is 25 Years & I want to purchase mediclaim policy. Which is the best mediclaim policy – I can give premium upto Rs 4000 per year.
Hi Rajendra
Medical Insurance or Life Insurance is never taken this way that I can afford this much of premium so what should be my sum assured or which policy should I buy. It’s always other way round that you first check what exactly is your need, how much should be the sum assured & then you ask someone for premium. Normally if someone realizes that premium is not affordable means either he has not calculated his needs rightly or he is not managing his income rightly. If I assume that you want to have individual mediclaim policy with Rs 3 Lakh sum assured. My Suggestion will be go for Apollo Munich easy health insurance policy – its premium is competitive, claim settlement ratio is good & best part is you can renew it for life. Premium for this will be around Rs 3600.
How claims in mediclaim policy settled if there are 2 policies for the same person in 2 diffrent cos.
Hi Satish
Claim will be equally divided between both the companies.
Which is fastest cash reimbursement medical policy india?
Hi Fareed
As such there is no comparative data but if your documents are completed you can expect a fast disbursal. People have good experience with apollo & bajaj.
What is benefit of double mediclaim policy in india?
Hi Birbal
As such there is no benefit of taking 2 mediclaim policies but if you are buying second policy as top up policy- you can increase your sum assured with lesser premium.
can you guide me for a good medcilaim policy as there are many in the market and i am confused.
please guide me for a proper policy
and also for a good insurance term policy
i took bajaj allainaz and i got robbed it was a nightmare
Hi FT
We don’t advice products here – as product depends on specific needs of individual. A product that is good for you can turn fatal for others.
Search for a CFP near you.
Keep visiting TFL.
I am extremely thankful for your suggestions and guidelines.
I wish I had met you earlier, and increased the returns.
Keep up the good work.
Regards
Deepak Sharma
🙂
Many thanks for this very useful article.
Krishna
🙂
Can you share few more basic topics that you would like to read.
please share tax saving schemes and benefits for single women parent.
Hi, the article was very informative. Stresses the importance & the need to have a proper, suitable health insurance cover. Can you please add more details about on what grounds the claims are denied, too? I guess, this will be more helpful for the insured to be informed about this as some unpleasant surprises could be avoided. Thanks for the article, again.
@ Syed
We know this is one of the concerns people have, we will soon come up with such article.
Keep visiting TFL.