Types of Health Insurance Plans and How to Choose

Posted on: Dec 2, 2025 | 3 mins | Written by: HDFC ERGO Team

Types of Health Insurance Plans and How to Choose

With healthcare costs rising by nearly 14% every year, having a health insurance policy is one of the most reliable ways to protect both your well-being and your savings during a medical emergency. Since there are multiple types of health insurance plans, it becomes essential to understand which one best suits the needs of you, your parents, or your family. This blog will guide you through the various types of health insurance available in India and help you choose the right plan based on your specific requirements.

Major Categories of Health Insurance Plans

The main types of health insurance in India are as follows:

1. Individual Health Insurance

It is the most common type of health insurance, which covers an individual for any planned or unplanned medical expenses. It usually covers costs such as hospitalisation, medication, and pre- and post-care expenses, among others.

2. Family Floater Plan

A family floater plan covers your whole family under a single plan. It has a combined sum insured, which means the total sum insured is shared by all the family members covered. The plan is great for newly married couples or those living in a nuclear family. It is also a good option for parents to cover their depandent children.

3. Senior Citizen Health Insurance

A senior citizen health insurance policy is often a more suitable and economical choice for individuals aged 60 and above. These plans typically cover age-related illnesses, hospitalisation expenses, pre- and post-hospitalisation costs, daycare procedures, and, in some cases, domiciliary treatment.

4. Critical Illness Health Insurance

A standard health insurance plan may not always be sufficient to cover the high treatment costs associated with severe conditions such as heart attacks, cancer, or major organ failure. In such situations, a critical illness insurance plan is more suitable. It provides a lump-sum payout upon the diagnosis of a covered critical illness, regardless of whether hospitalisation is required. This lump sum can be used for treatment, lifestyle adjustments, loss of income, or any other financial needs during recovery.

5. Maternity Health Insurance

With rising medical costs, planning a pregnancy has become increasingly expensive, and most standard health insurance plans do not cover maternity-related expenses. Maternity insurance, however, is designed specifically for this purpose. It typically covers pre- and postnatal care, delivery costs, and even newborn vaccinations, ensuring financial support throughout the maternity journey.

6. Top Up Health Insurance

A top-up health insurance policy acts as an additional layer of protection for individuals who feel their existing health coverage may be insufficient. Unlike regular health plans, top-up policies offer a higher sum insured but come with a mandatory deductible, which is the amount you must pay before the policy benefits take effect.

7. Personal Accident Cover

Most health insurance plans do not offer a lump-sum payout in the event of accidental death or permanent or temporary disability. A personal accident cover fills this gap by providing a fixed lump sum that can be used for medical treatment as well as managing household expenses during recovery. In the unfortunate event of the policyholder’s death, the benefit amount is paid to the nominated family member.

8. Hospital Cash Insurance

Hospital cash insurance provides a fixed daily allowance for each day of hospitalisation. This amount can be used to cover out-of-pocket expenses that regular health insurance may not include, such as food, travel, or other incidental costs. The payout is given up to a predefined limit and is not linked to the actual hospital bill, giving you additional financial flexibility during recovery.

9. Disease-Specific Health Insurance

Disease-specific health insurance provides coverage for the treatment of a particular illness, such as diabetes, cancer, or cardiac conditions. This type of insurance helps manage ongoing or high-cost treatments more efficiently.

Other Types of Health Insurance Plans

The above-mentioned health insurance plans can be grouped into two broader categories, such as:

1. Indemnity Health Insurance

Indemnity health insurance reimburses the actual medical expenses incurred during hospitalisation or allows cashless treatment at network hospitals. You can make multiple claims in a policy year, as long as they do not exceed the sum insured. This type of plan covers expenses such as hospital bills, doctor’s fees, diagnostic tests, and other in-patient costs.

2. Fix Benefit Health Insurance

Fixed benefit health insurance policies provide a lump-sum payout upon the diagnosis of a covered illness or the occurrence of an accident. The payout is not linked to actual medical bills. This amount can be used for treatment, recovery, or any other financial needs arising from the health condition.

Factors to Consider Before Choosing a Plan

Before selecting a health insurance policy, keep the following key factors in mind to ensure you choose the one that best fits your needs:

• Age:

Choose individual health insurance if you’re young; opt for senior citizen plans for elderly family members.

• Current health condition:

Healthy individuals can choose standard plans; those with a history of serious illnesses should consider critical illness insurance.

• Coverage needed:

Select a plan based on your needs, such as regular health insurance, disease-specific coverage, top-up plans, or maternity insurance.

• Waiting period:

Look for policies with shorter waiting periods for pre-existing diseases, maternity, and critical illnesses.

• Exclusions:

Check what is not covered by the policy.

Conclusion

With healthcare costs rising rapidly, having health insurance is no longer optional; it’s essential. However, choosing the wrong type of plan can leave you underinsured or paying higher premiums than necessary. By comparing the different types of health insurance and evaluating various factors, you can select a policy that offers the right balance of coverage, affordability, and convenience.

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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