At the time of purchasing medical insurance, the premium displayed on the policy page often becomes the deciding factor. It is human nature to seek affordability. However, the gap between the policy cost and the actual expense during a hospitalisation can be significant. Besides the pricing of insurance premiums, there are multiple aspects that need to be checked so that coverage brings value for your health. In this context, this blog explores the role of low-cost premiums on health insurance in India.
The Hidden Costs of a Low Premium Policy
A lower premium may feel like a win. But the true cost of a policy is not just what you pay annually, it is also connected with the benefits you get at the time of making claims. Some of the hidden costs under the shadow of low medical insurance premiums include:
| Hidden Cost Area | Impact |
| Room Rent Capping | You pay the difference between the actual room rate and the sub-limit out of your pocket. |
| Co-payment Clause | 10-20% of the entire bill becomes your immediate liability. |
| Non-Coverage of Modern Treatments | Advanced procedures (robotic surgery, oral chemotherapy) may be excluded. |
Where a Balanced Policy Creates ‘Visible’ Savings?
A policy with balanced health insurance premiums often includes features that put the amount paid back in your pocket or reduce your taxable income. There are tangible financial benefits that offset the initial cost difference, here they are as follows:
Health Insurance Tax Savings Under Section 80D
As per Section 80 of the Income Tax Act 1961, you can get deductions for your taxable income. These deductions are available when the insurance is paid online. The tax deductions are available in the following ways:
- People aged less than 60 years can get up to ₹25,000 deductions.
- Senior citizens (aged 60 and above) can get up to ₹50,000 deductions.
You may also be eligible to get deductions up to ₹5,000 for pre-health check-ups and the payment can also be made in cash.
Accumulation of No Claim Bonus (NCB)
Many balanced health insurance plans offer NCB that gives a discount on premiums or offers other bonuses that assist in reducing premiums.
Preventive Benefits
On some individual or family health insurance plans, you can get free health check-up options. For example, insurers like HDFC ERGO’s health insurance offer preventive health check-up options in a few plans post completion of the first year of the policy.
Matching Policy to Life Stage
The health insurance policies may hold unique values for people of different ages. Here’s how it may impact across age groups:
The Young Professional (25-40 years)
Primary Concern: Low immediate cash outflow, coverage for accidents common in this age group.
What to Prioritise:
- Personal accident cover
- Coverage for day-care procedures
- High NCB accumulation for the future
2. The New Parent / Young Family (30-40 years)
Primary Concern: Protecting the entire family and covering children’s health needs.
What to Prioritise:
- Restoration benefit
- Maternity or newborn cover
The Sandwich Generation (40-60 years)
Primary Concern: Covering self, spouse and ageing parents simultaneously.
What to Prioritise:
- Senior citizen-friendly network hospitals
- Coverage for pre-existing diseases (diabetes, BP) with low waiting periods
- Consumables cover (This includes coverage for stents, knee implants, and pacemakers)
The Senior Citizen (60+ years)
Primary Concern: High coverage, minimal out-of-pocket expense at the time of making claims.
What to Prioritise:
- Minimal co-payment clause
- High sum insured with less room rent sub-limits
- Domiciliary hospitalisation cover
Things You Should Check Before Purchasing Health Insurance in India
There are three main things you should check to choose the right health insurance for yourself and your family. These include:
- Read the Exclusions Page: Read the policy details, sub-limits, scope of coverage and waiting period of health cover.
- Check the Hospital List: Medical insurers usually have a network of hospitals in which you can make claims. Check the names of your nearby hospitals to ensure that the policy will be effective if claims are made in these healthcare facilities.
- Read the Claim Settlement Ratio: The claim settlement ratio is calculated by dividing the number of claims received by the number of claims approved. The higher the ratio, the higher the probability of a reliable insurer.
Final Thoughts
So if you are looking to purchase health insurance with a minimal premium, then take a pause and do a few necessary checks. There are a few more factors that make a health insurance policy valuable, including scope of coverage, network of hospitals, sub-limits, availability of NCB and preventive benefits. With the evaluation of all of these factors, you can choose the right medical insurance for you and your family.
