What Is Health Insurance? – Complete Guide
Health insurance is a financial arrangement that helps individuals and families cover medical and hospitalization expenses arising from illness, accidents, or critical diseases. The insurer pays medical costs either through cashless treatment at network hospitals or by reimbursing expenses, in return for a regular premium.
With rising healthcare costs in India, health insurance has become an essential component of financial planning.
Types of Health Insurance in India
Health insurance policies are designed to meet different healthcare needs:
1. Individual Health Insurance
Provides coverage for a single person with a dedicated sum insured.
2. Family Floater Health Insurance
One policy covers the entire family under a shared sum insured.
3. Senior Citizen Health Insurance
Specially designed for people aged 60 years and above.
4. Critical Illness Insurance
Provides a lump-sum payout on diagnosis of specified critical illnesses.
5. Group Health Insurance
Offered by employers to employees as part of benefits.
Number of Health Insurance Companies in India
As per IRDAI, India has over 30 insurance companies offering health insurance, including:
Public Sector Insurers
- New India Assurance
- United India Insurance
- Oriental Insurance
- National Insurance
Private General Insurance Companies
- ICICI Lombard
- HDFC ERGO
- Bajaj Allianz
- Tata AIG
- SBI General
Standalone Health Insurance Companies
- Star Health & Allied Insurance
- Niva Bupa Health Insurance
- Care Health Insurance
- ManipalCigna Health Insurance
These insurers provide a wide range of individual, family, and corporate health insurance plans.
Tax Benefits of Health Insurance in India
Health insurance offers attractive tax savings under the Income Tax Act, 1961.
Tax Deduction Under Section 80D
| Category | Maximum Deduction |
|---|---|
| Self, spouse & children | ₹25,000 |
| Parents (below 60 years) | ₹25,000 |
| Parents (senior citizens) | ₹50,000 |
| Senior citizen (self) | ₹50,000 |
- Preventive health check-ups up to ₹5,000 are included within the above limits
- Premium must be paid through non-cash modes (except preventive check-ups)
Why Health Insurance Is Important
- Covers high hospitalization and treatment costs
- Provides cashless treatment at network hospitals
- Offers financial security during medical emergencies
- Helps in tax planning
- Reduces out-of-pocket medical expenses
How to Choose the Right Health Insurance Policy
- Evaluate medical needs and family size
- Choose adequate sum insured
- Check waiting periods and exclusions
- Review network hospitals
- Compare claim settlement ratio and premium
Conclusion
Health insurance is no longer optional—it is a necessity. With multiple insurers offering competitive plans and significant tax benefits under Section 80D, having the right health insurance policy ensures financial protection, peace of mind, and tax efficiency.
At Saving Mantra, we help you compare health insurance policies and choose the best plan suited to your healthcare and financial needs.
Disclaimer
This blog is for informational purposes only and does not constitute medical, financial, or tax advice. Policy terms, coverage, and tax benefits are subject to change as per IRDAI guidelines and income tax laws. Please consult a qualified insurance advisor or tax professional before purchasing any health insurance policy.