Quick answer: Health insurance for a family of four in a metro should start at ₹10 lakh cover, not the ₹3 to ₹5 lakh most people buy, because a single hospitalisation for something serious can exhaust a small policy. A family floater is cheaper than individual policies when everyone is young and healthy; individual policies make more sense once a parent is over 50 or has a condition. The waiting period for pre-existing conditions is the clause that decides whether your claim is paid, so buy early rather than when you need it.
How much cover you need
| Situation | Suggested cover | Reasoning |
|---|---|---|
| Young couple, small city | ₹5–10 lakh | Lower treatment costs; cover can be topped up later |
| Family of four, metro | ₹10–25 lakh | Metro hospital costs escalate fast |
| Family with a member over 60 | ₹15–25 lakh plus separate senior policy | Older members consume the floater |
| Family history of serious illness | ₹25 lakh or a base plus super top-up | Critical treatment runs into lakhs |
| Any household | Base policy plus super top-up | The cheapest way to reach high cover |
The practical route to large cover without a large premium is a base policy of ₹5 to ₹10 lakh plus a super top-up of ₹20 to ₹50 lakh above a deductible. A super top-up costs a fraction of a full policy of the same size because it only pays above the threshold, and unlike a plain top-up it considers cumulative claims across the year rather than a single claim.
Family floater vs individual policies
| Family floater | Individual policies | |
|---|---|---|
| Premium | Lower for a young family | Higher overall |
| Cover sharing | One pool shared by all members | Each person has their own cover |
| Risk | One major claim can exhaust the year’s cover for everyone | Isolated to that person |
| Pricing basis | Usually the age of the eldest member | Each person priced on their own age |
| Best for | Couples and young children | Families with older parents or existing conditions |
The common mistake is including elderly parents in a floater. The premium is then set by their age for everyone, and a single claim by them can leave the children uncovered. Separate senior citizen policies usually work out better.
The clauses that actually decide your claim
- Pre-existing disease waiting period: the regulatory maximum is 36 months. Check the shorter period, if any, in your policy.
- Initial waiting period, usually 30 days for anything except accidents.
- Specific ailment waiting period, often 2 years for cataracts, hernia, joint replacement and similar.
- Room rent capping. A limit of 1% of sum insured per day sounds minor, but if you take a costlier room eligible associated charges may also be reduced under the policy’s wording; do not assume every bill item is reduced. Prefer policies with no room rent limit.
- Co-payment, a fixed percentage you pay on every claim. Common in senior policies and worth avoiding if you can.
- Sub-limits on specific procedures such as cataract surgery.
- Restoration benefit, which reinstates the sum insured if it is exhausted during the year.
- No-claim bonus, which increases cover for each claim-free year at no extra premium.
Cashless vs reimbursement
Cashless treatment works only at hospitals in your insurer’s network. Check that the hospitals you would realistically use are in the network before buying, because in an emergency you will not want to arrange funds and claim later. For reimbursement claims, keep every original bill, the discharge summary and prescriptions; missing documents are the main cause of partial settlement.
What is usually not covered
- Cosmetic treatment, unless reconstructive after an accident
- Dental and vision in most standard policies
- Treatment arising from alcohol or substance abuse
- Self-inflicted injury
- Experimental or unproven treatment
- OPD consultations, unless the policy specifically includes OPD cover
- Maternity, unless a maternity benefit is included and its waiting period, often 2 to 4 years, has passed
Buying checklist
- Disclose every condition and habit honestly. Incomplete disclosure can affect a claim; answer the proposal questions truthfully.
- Check the insurer’s claim settlement ratio and, more usefully, the incurred claims ratio published by IRDAI.
- Confirm your preferred hospitals are in the cashless network.
- Prefer no room rent capping and no co-payment.
- Check whether the policy offers lifetime renewability.
- Renew on time. Renewal within the applicable grace period preserves continuity credits; check the policy’s coverage during that period.
- Under the old tax regime, premiums qualify for deduction under Section 80D; see old vs new tax regime.
Frequently asked questions
Is my employer’s group health cover enough?
No. It typically has low cover, ends when you leave the job, and rarely covers parents adequately. Treat it as supplementary to your own policy.
Can I port my policy to another insurer?
Yes. IRDAI rules allow portability at renewal with waiting periods already served being carried over, provided you apply within the notice window before renewal.
What is a super top-up, simply?
A policy that pays once your total claims in a year cross a set deductible. If you have ₹5 lakh base and a ₹20 lakh super top-up above ₹5 lakh, you effectively have ₹25 lakh cover at a much lower combined premium.
Should I buy online or through an agent?
Online is usually cheaper and the policy wording is identical. A good agent earns their commission at claim time, so the question is whether you have one you trust.
Last updated September 2026. Policy terms, waiting periods and tax provisions vary by insurer and change; read the policy wording and consult a qualified adviser. General information, not insurance advice.
Sources
Checked against: IRDAI — health insurance guidance. Rules, fees and rates change — check the official page before you act on anything here.
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