If you’re a salaried employee in India, chances are you’ve either ignored health insurance till now or just gone with whatever your HR handed over during the onboarding process. Don’t worry—you’re not alone. Most of us think of health insurance only when we fall sick, get hospitalized, or see a relative’s medical bills shoot into lakhs overnight.
But here’s the truth: health insurance is not optional anymore. It’s as important as your monthly salary. Without it, one major medical emergency can wipe out your savings, derail your financial plans, and even push you into debt.
In this post, we’ll cover everything you need to know about health insurance in India—especially if you’re a working professional trying to figure out how much cover is enough, which plan to choose, and what mistakes to avoid.
Why Health Insurance Is Crucial for Salaried Indians
Imagine this: you earn ₹60,000 a month, save ₹15,000 diligently, and slowly build your emergency fund. Suddenly, a family member requires hospitalization for a surgery costing ₹4–5 lakhs. That’s several years of your savings gone in one shot.
This is the exact situation health insurance is designed to protect you from. Some key reasons:
- Medical inflation in India is insane – Hospital bills increase at 12–15% every year. What cost ₹2 lakhs five years ago might cost ₹5 lakhs today.
- Employer-provided health cover is limited – Most company policies cover just ₹2–3 lakhs and don’t extend after you switch jobs or retire.
- Healthcare costs drain savings – Without insurance, even middle-class families are forced to dip into fixed deposits, break investments, or take loans.
- Lifestyle diseases are on the rise – Diabetes, heart disease, and obesity-related illnesses are common among working professionals in their 30s and 40s.
So, if you’ve been delaying health insurance thinking you’re young and healthy—remember, health emergencies don’t send invites.
How Much Health Insurance Cover Do You Actually Need?
This is the biggest question most salaried people have. Should you go for ₹3 lakhs, ₹5 lakhs, or a whopping ₹25 lakhs cover?
The answer depends on a few factors:
1. Where You Live
- If you live in a metro city (Delhi, Mumbai, Bangalore, Chennai, Hyderabad), go for at least ₹10–15 lakhs individual cover.
- For Tier-2 cities, ₹7–10 lakhs may be sufficient today, but remember—you may need higher cover in future.
2. Your Family Size
- Single salaried person: ₹7–10 lakhs individual policy is good.
- Married couple (no kids yet): Go for family floater of ₹15–20 lakhs.
- Couple + 2 kids: Start with a floater of ₹20–25 lakhs.
- Including parents: Better to buy separate senior citizen policies for them (premiums are high but necessary).
3. Your Age
- 25–30 years old: ₹7–10 lakhs cover
- 30–40 years: ₹10–15 lakhs cover
- 40–50 years: ₹15–20 lakhs cover (or higher depending on lifestyle and family history)
4. Lifestyle & Health Risks
If your family has a history of diabetes, heart disease, or cancer—err on the side of higher coverage.
💡 Rule of Thumb: Take health cover at least 10x your monthly salary or ₹10 lakhs minimum (whichever is higher).
Types of Health Insurance Plans in India
When you first start browsing, health insurance can feel confusing. Let’s simplify:
1. Individual Health Insurance
- Covers only one person (you).
- Premium depends on your age and sum insured.
- Good if you’re unmarried or want separate cover for each family member.
2. Family Floater Plan
- Single sum insured shared among family members (spouse, kids, sometimes parents).
- More cost-effective than buying separate policies.
- Best for young families.
3. Top-Up / Super Top-Up Plan
- Works like an add-on.
- Example: If you have ₹5 lakh base cover, you can take a ₹15 lakh top-up (kicks in after ₹5 lakh is exhausted).
- Affordable way to boost coverage without huge premiums.
4. Senior Citizen Plan
- Specially designed for parents above 60.
- Premiums are higher but offer necessary cover for age-related health issues.
5. Critical Illness Plan
- Lump-sum payout on diagnosis of major illnesses like cancer, kidney failure, or heart disease.
- Acts as an income replacement when you can’t work.
What Does Health Insurance Actually Cover?
Most salaried people assume health insurance covers everything. Unfortunately, that’s not true. Here’s what a standard policy covers:
✅ Hospitalization (room rent, doctor fees, ICU charges, medicines)
✅ Pre- and post-hospitalization expenses (30–90 days before and after admission)
✅ Surgeries and daycare procedures (like cataract, chemotherapy)
✅ Ambulance charges
✅ Some policies cover annual health check-ups
But here’s what is usually NOT covered (or covered with conditions):
❌ Cosmetic surgeries (unless medically necessary)
❌ Dental treatment (unless accidental)
❌ Pre-existing diseases (usually covered only after 2–4 years waiting period)
❌ Pregnancy and maternity (covered in specific plans with waiting periods)
Common Mistakes Salaried Employees Make with Health Insurance
- Relying only on employer health insurance – Job changes, layoffs, and retirement can leave you exposed. Always have a personal policy.
- Choosing lowest premium plans – Low premiums often mean low coverage and high hidden exclusions.
- Not disclosing health conditions – If you hide diabetes or smoking habits, claims may be rejected. Always be honest.
- Taking too little cover – ₹2–3 lakh cover is not enough anymore. Even minor hospitalizations can exceed that.
- Delaying purchase – The earlier you buy, the cheaper the premium. Buying after 40 means much higher costs.
How to Choose the Best Health Insurance Plan in India
When comparing plans, don’t just look at premiums. Check these key factors:
- Network Hospitals – Choose insurers with wide cashless hospital networks in your city.
- Room Rent Limit – Many policies cap room rent (e.g., ₹5,000/day). Pick policies with no such limits.
- Co-payment Clause – Some insurers ask you to pay 10–20% of the bill. Avoid co-pay unless you want lower premiums.
- Waiting Periods – Check waiting time for pre-existing diseases and maternity benefits.
- Renewability – Choose policies with lifetime renewability.
- Claim Settlement Ratio – Look for insurers with high claim settlement ratio (above 90%).
Example: A Practical Health Insurance Plan for a Salaried Family
Let’s assume you’re 32 years old, earning ₹70,000 per month, married with one child.
Here’s a solid health cover strategy:
- Base Family Floater: ₹10 lakh cover (~₹15,000 annual premium)
- Super Top-Up: ₹20 lakh cover (~₹4,000 annual premium)
- Separate Parents Cover: Senior citizen policy of ₹5 lakh each (~₹20,000 annual premium per parent depending on age/health)
This way, your family enjoys a ₹30 lakh effective cover at an affordable premium.
How Much Should You Budget for Health Insurance?
As a thumb rule:
- Spend 2–3% of your annual salary on health insurance premiums.
- Example: If your annual salary is ₹8 lakhs, you can comfortably spend ₹16,000–₹24,000 on health cover.
Remember, this is not an expense—it’s financial protection.
Health Insurance vs Corporate Insurance: Which Should You Trust More?
Most salaried employees get free group insurance from their company. But here’s why it’s not enough:
- Coverage is usually low (₹2–3 lakhs).
- Coverage ends if you resign, switch jobs, or retire.
- Limited customization.
Corporate cover is good to have, but always supplement it with your own individual/family plan.
The Future of Health Insurance in India (2025 and Beyond)
The health insurance landscape is evolving:
- More digital-first insurers (like Acko, Digit) offering hassle-free policies.
- Wellness-linked policies where premiums reduce if you stay healthy.
- Better integration with OPD, telemedicine, and preventive care.
For salaried employees, this is good news—affordable and smarter plans will become the norm.
Final Thoughts
If you’re a salaried professional in India, don’t postpone health insurance.
- Start with at least ₹10–15 lakhs cover for yourself.
- Add family floater for spouse and kids.
- Take separate cover for parents.
- Boost with a top-up for higher protection.
Medical emergencies don’t just drain money—they drain peace of mind. With the right health insurance, you’re not just protecting your finances, you’re protecting your family’s future.
💡 Start today. Don’t wait until a medical emergency forces you to regret.
About the Author
