What Is the Average Health Insurance Cost in India

Posted on: Jan 8, 2026 | 3 mins | Written by: HDFC ERGO Team

What Is the Average Health Insurance Cost in India

Health insurance is one of the most discussed and debated costs in personal finance. They affect individuals, families, and employers alike. Amid rising healthcare expenses and regulatory changes, understanding what people actually pay for health coverage has never been more important. Average health insurance costs vary significantly by location, age group, and plan type. Let's discuss it all here.

What Determines Health Insurance Cost

Here are the three most common factors that affect the health insurance plan premium:

Age

As you grow older, your body becomes susceptible to lifestyle diseases such as diabetes and thyroid disorders, chronic conditions such as kidney and cardiac diseases, and age- related medical issues. All these conditions increase the likelihood of recurring hospitalisations and daycare, and the insurer levies a higher premium.

On the other hand, if you are young, lead an active lifestyle, and follow a healthy diet, the likelihood of encountering serious health issues is much lower. Factoring this in, the younger you are, the lower your health insurance premium will be.

Location

Whether you live in an urban or rural area also impacts the premium cost. Take the example of Delhi. Being a metropolitan city, Delhi has advanced healthcare facilities, but hospital treatment costs, consultation fees, and diagnostic charges are higher than in smaller cities or rural areas.

Additionally, there are higher rates of lifestyle diseases such as diabetes, hypertension, and heart conditions due to sedentary lifestyles, pollution, and stress. As a densely populated city, Delhi also sees a high number of road accidents. These factors increase the probability and cost of claims.

Sum Insured

Sum insured represents the maximum amount the insurer will pay for medical expenses in a policy year. A higher sum insured increases the potential liability for the insurer.

Therefore, to cover the risk, they charge a higher premium. Conversely, a lower sum insured reduces the insurer’s exposure, resulting in a lower premium.

Typical Average Cost in India (General Range)

On average, the medical insurance premium for an individual with a sum insured of ₹5–10 lakh ranges from ₹12,000 to ₹25,000 annually, depending on age, city, and insurer. If you are buying a family floater plan that covers four members, it would cost you around ₹18,000–₹30,000 per year. Senior citizen plans cost a bit more, and the premium can be in the ₹35,000–₹60,000 bracket annually due to increased health risks.

Although IRDAI has introduced caps to prevent excessive hikes, rising medical inflation of 10–12% annually, lifestyle diseases, and expanded coverage options have pushed premiums upward. (e-Bharat)

Cost Differences for Individuals, Families, and Seniors

Since premiums are based on age, risk profile, and the number of people covered, health insurance costs vary significantly between individuals, families, and seniors.

For young individuals aged 18–30 years, premiums are lowest since they are generally healthier, with annual costs often only a few thousand rupees for basic coverage. As age increases into the 30s and 40s, premiums rise moderately due to a higher risk of lifestyle‑related illnesses.

For family floater plans, the cost is typically higher than that of a single-individual plan. However, when compared with the total premium for separate coverage for each individual, floater plans are more cost-effective. It is important to note that the age of the eldest family member plays a key role in determining the policy premium.

When it comes to senior citizens, premiums increase substantially because healthcare utilisation and chronic conditions rise with age.

How Add-ons Increase or Decrease Cost

Add-ons, also called riders, directly influence your total premium. The reason? They modify the base coverage. When you include riders such as maternity cover, critical illness, OPD cover, and/or room-rent waiver, the insurer assumes a higher risk and, to mitigate the same to some extent, charges an additional premium over and above the cost of your base plan.

Let's understand this with an example of a maternity add-on, which covers prenatal consultations, routine check-ups, ultrasounds, blood tests, and hospitalisations for normal or C-section deliveries. Since maternity is a planned expense and not an emergency, there is a high likelihood of a claim in the coming years, resulting in a liability for the insurer.

Therefore, to mitigate their risk, they levy additional costs and also impose a waiting period that, depending on the insurer, can range from 1 to 3 years.

Tips To Choose Cost-Effective Plans

Here are some tips to choose the cost-effective health insurance plans:

• Sub-Limits:

Check whether the insurer imposes sub-limits on different medical treatments or caps room rent. Such restrictions can cause partial claim payments even when hospital bills are legitimate. If yes, look for insurers without this restriction.

• Deductible Levels:

A deductible in health insurance is the fixed amount you pay from your own pocket before the insurer starts covering medical expenses.

It is classified as compulsory and voluntary. If you want an affordable premium and are comfortable with higher out-of-pocket expenses at the time of claim, opt for a higher voluntary deductible.

• Portability Option:

Check whether the insurer allows easy porting without losing accumulated benefits. Portability lets you switch from expensive or poorly serviced insurers, ensuring long-term affordability and uninterrupted coverage.

• Network Hospital:

These hospitals offer cashless medical care, so you don't have to make upfront payments. It is important not only to check the list of network hospitals of your insurer but also to verify whether they have tie-ups with healthcare facilities near your home and workplace, so you can easily access them in case of a medical emergency.

Conclusion

Health insurance costs in India vary widely based on age, location, sum insured, and plan type. Additionally, premiums also differ depending on whether you purchase an individual cover or a family floater plan. When choosing affordable coverage, instead of considering only the premium, pay attention to deductibles, sub-limits, portability, and network hospitals.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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