In India, healthcare costs are rising steadily, with even basic hospitalisation bills often running into several lakhs. For most families, health insurance is no longer optional but a necessity. However, many people hesitate to buy policies because of the growing burden of premiums.
The good news is that premiums can be optimised without compromising on essential coverage. By making informed choices and adopting a proactive approach, you can reduce your premium outgo while still enjoying adequate protection for yourself and your family.
Before looking at ways to reduce premiums, it is important to understand what drives the cost of a health insurance policy in India:
● Age: Younger buyers pay lower premiums, while premiums rise significantly as one grows older.
● Health Condition: Pre-existing illnesses or lifestyle diseases increase risk for insurers, leading to higher charges.
● Lifestyle Habits: Smoking, drinking or obesity can raise premiums.
● Policy Type and Sum Insured: Higher coverage and additional riders increase the cost.
● Family Composition: Covering more members under a single plan affects premium amounts.
Here are some effective strategies you can adopt to bring down your health insurance premiums without compromising on the quality of coverage.
Health insurance premiums rise with age. A policy purchased at 25 could cost half of what it would at 40 for the same coverage.
Starting early not only secures lower premiums but also ensures that you serve out waiting periods for pre-existing diseases or maternity cover well before you may need them. It also provides peace of mind that you are financially protected from an early stage in life.
If you are healthy and rarely need hospitalisation, a deductible or co-payment plan can be a smart way to reduce premiums. With a deductible, you agree to pay a certain amount out of pocket before the insurer’s coverage begins.
Co-payment, on the other hand, means splitting a fixed percentage of the medical bill with your insurer. These options lower the insurer’s risk, and in return, they charge you less.
Instead of buying individual policies for each family member, consider a family floater plan, where a single sum insured is shared among all family members. For example, a ₹10 lakh floater plan for four members is typically more cost-effective than four individual policies of ₹5 lakh each.
Since not every member may need hospitalisation at the same time, family health insurance plans maximise value and ensure everyone is protected.
More coverage means higher premiums, but underinsuring yourself is risky too. A realistic sum insured should reflect your city of residence (metro vs. tier-2), family size, and expected medical costs.
For instance, ₹10–15 lakh may be sufficient for a young family in a metro, whereas a single individual in a smaller city might do well with ₹5–7 lakh plus a top-up plan. Avoid paying for unnecessary excess coverage.
Insurers often evaluate your health before deciding premiums. Smoking, excessive drinking, obesity and sedentary habits may lead to higher charges or exclusions.
On the other hand, maintaining fitness, eating balanced meals and undergoing regular check-ups can help you get policies at more affordable rates. Some Indian insurers also reward healthy policyholders with wellness discounts, loyalty points or reduced renewal premiums.
Instead of renewing your health insurance every year, opt for a two- or three-year plan. Insurers typically offer discounts of 5–10% on long-term policies.
This also protects you from annual premium hikes and saves the hassle of remembering yearly renewals. It’s a win-win if you can afford the upfront cost.
Policy features and premiums vary widely across insurers. Comparing plans on IRDAI-approved aggregator websites allows you to spot better value-for-money options.
You may find two policies with similar premiums but very different room rent limits, network hospitals or waiting periods. Taking time to compare ensures you get the most suitable policy at the most reasonable cost.
Add-ons such as maternity cover, critical illness, OPD cover or personal accident protection can add 15–25% extra to your premium.
While useful in certain life stages, piling on too many add-ons can make your policy unnecessarily expensive. Choose only the ones most relevant to your family’s needs instead of opting for every available add-on.
When you do not file claims during a policy year, insurers reward you with a No-Claim Bonus. This can either reduce your premium on renewal or increase your sum insured without extra cost.
Over time, your base coverage of ₹5 lakh can increase to ₹7–8 lakh, all while paying the same premium. Make sure you renew on time, as missing deadlines could lead to losing accumulated benefits.
Many organisations in India provide group health insurance at little or no cost to employees. While this coverage is useful, it usually comes with limited sum insured and ends when you switch jobs or retire.
A good strategy is to use employer cover as a first line of protection and supplement it with a reasonably priced personal or family floater plan. This avoids the need for a very high personal cover and helps keep premiums low.
Insurers often add administrative costs when you choose to pay monthly or quarterly. Paying your premium annually in a lump sum is cheaper and more convenient, as you don’t risk missing installments.
Even if the discount is small, it adds up over time, making annual payments a smart cost-saving habit.
Raising the sum insured of your base policy can make premiums expensive. Instead, consider adding a top-up or super top-up policy.
A top-up plan kicks in after a single large claim crosses a deductible limit, while a super top-up covers multiple claims in a year once the deductible threshold is met. These are affordable and offer a financial cushion for high medical costs without inflating your base premium.
Lowering your health insurance premium is not about cutting corners. It is about making strategic decisions. Buying early, choosing the right type of plan, avoiding unnecessary extras and maintaining a healthy lifestyle are practical ways to keep costs under control.
At the same time, it is important not to compromise on essential coverage for the sake of saving a few thousand rupees. The best strategy is to balance affordability with adequate protection, ensuring that your health insurance works as a safety net when you need it the most.
Disclaimer: This article is published in association with Go Digit and not created by TNM Editorial.