Last updated: October 2026 Β· 3 min read
A single hospital stay can cost lakhs. Health insurance pays for hospitalisation and many related expenses so medical bills do not drain your savings. Since September 2025, individual health insurance premiums are GST-free, making cover cheaper.
Key terms you must understand
| Term | Meaning |
|---|---|
| Sum insured | Maximum amount the policy pays in a year |
| Family floater | One sum insured shared by the whole family |
| Waiting period | Time before certain illnesses or pre-existing diseases are covered (IRDAI capped pre-existing disease waiting at 3 years from 2024) |
| Co-payment | Percentage of each claim you pay yourself |
| Room rent limit | Cap on daily room charges; exceeding it can reduce the whole claim proportionately |
| No-claim bonus | Sum insured increase for claim-free years |
| Sub-limits | Caps on specific treatments like cataract |
| Restoration | Refills sum insured if exhausted |
What is usually covered
- Hospitalisation over 24 hours, including room, ICU, doctor and surgery charges.
- Day-care procedures that need less than 24 hours.
- Pre-hospitalisation (often 30-60 days) and post-hospitalisation (60-180 days) expenses.
- Ambulance charges.
- AYUSH treatment in recognised hospitals.
- Many policies now cover modern treatments and some OPD.
How much cover do you need?
For metros, many advisors suggest at least βΉ10-15 lakh family floater, with a super top-up for larger amounts. Super top-ups add high cover at low cost once a deductible is crossed.
How to choose a policy
- Prefer no room rent capping or a single private room.
- Avoid high co-payment unless you are buying a senior citizen plan.
- Check the network hospitals near you.
- Look at claim settlement record and service reviews.
- Check restoration, no-claim bonus and waiting periods.
- Declare all pre-existing conditions truthfully.
Employer cover is not enough
Group health insurance from your employer ends when you leave the job and may have limited cover. Buy a personal policy while you are young and healthy so waiting periods are completed early.
Frequently asked questions
Is health insurance GST-free now?
Yes. Since 22 September 2025, individual health insurance policies are exempt from GST.
Can senior citizens buy health insurance?
Yes. IRDAI removed the upper age limit for buying health insurance in 2024; premiums and conditions vary.
What is the tax benefit on health insurance?
Under the old regime, premiums qualify for deduction up to βΉ25,000 (βΉ50,000 for senior citizens), with extra for parents; not available in the new regime.
Keep exploring
- How to claim health insurance
- Ayushman Bharat PM-JAY
- Term insurance explained
- More Insurance articles on Tiwaripedia
This article is for general information, not financial, tax or legal advice. Rates, limits and rules change; always confirm on the official website or with a qualified advisor before you act. Spotted something that needs updating? Let us know.
