What is the Average Cost of Health Insurance?

When people ask about the “average cost” of health insurance, they’re rarely asking for a number. Most are really trying to figure out three things at once: Can I afford it? Am I choosing a good plan for the price? And will I even qualify at this cost? 

This guide explains what really drives health insurance costs in India, how to read premium ranges correctly, and how to choose a plan that balances price with real claim protection.

Understanding the Cost Elements of Health Insurance

In simple terms, the cost elements of a health insurance policy refer to the total expense of maintaining a health insurance policy.

Before you compare premiums or pick a plan, here’s a list of key components that decide what you pay for your health cover and what you actually get during a claim.

Factors Affecting the Cost of Health Insurance

• Your Age and Medical History: Premiums rise as you grow older, and if you have pre-existing conditions such as asthma or diabetes(since the risk of claims increases).For young adults in their 20s to 40s, health insurance premiums for a ₹15 lakh cover range between ₹10,000 and ₹19,000 annually. Premiums gradually rise with age due to a higher risk of hospitalization and illnesses, reaching ₹22,000 by the age of 45.
• Location: If you live in a metro city, your health insurance premium is usually higher because treatment costs are higher there. For example, a 25-year-old buying HDFC Ergo Optima Secure with ₹15 lakh cover pays about ₹14,060 in Delhi, but only around ₹13,110 in Patna for the same policy.
• Lifestyle Habits: Smoking, tobacco use, High BMI, or other high-risk habits can push your premium up.  For instance, a 35-year-old who maintains a healthy lifestyle may pose a lower risk and pay a lower premium when compared to a 25-year-old with poor lifestyle choices simply because the latter has a higher probability of making claims.
• Sum Insured and Add-ons: Higher cover amounts and optional add-ons like super bonus or consumables cover increase the premium.  You must be careful while opting for add-ons, as some of them, like maternity, OPD, and international coverage, are more expensive than others, so only include them if you need them.
• Medical Inflation: Healthcare costs rise every year, and insurers adjust premiums to keep up with this inflation.
• Type of Plan: Plans with co-pay, room-rent limits, deductibles, or group structures are cheaper upfront but increase out-of-pocket costs during claims, while comprehensive individual plans cost more but offer broader protection.
• Overall claims experience: From an insurer's perspective, premium hikes can be based on how much the insurer pays out in claims across its entire customer base, not on your personal claim history.
• Operating and Distribution Costs: Expenses related to servicing policies, hospital networks, and agent commissions also impact pricing at the insurer level.

Note: Health insurance premiums increase with age and inflation at renewal. Insurers cannot raise your premium just because you made a claim. Any increase is applied to the whole group of similar policyholders. Always check with your insurer or advisor about the expected hike at renewal.

Average Health Insurance Premiums

Here's an overview of the average individual and family floater health insurance premiums:

Note: The listed premiums (inclusive of recommended add-ons) are for comprehensive plans and are illustrative. The premiums are for a 15 lakh sum insured for people living in Delhi.

Note: The listed premiums (inclusive of recommended add-ons) are for comprehensive plans and are illustrative. The premiums are for a 15 lakh sum insured for people living in Delhi.

How Much Does Health Insurance Cost per Month?

If you want very cheap health insurance, it’s easy to get one. You can simply choose a plan with high co-payments, strict room rent limits (like only a general ward), disease-wise sub-limits, and remove useful features such as restoration or a no-claim bonus. On paper, this can bring your premium down to just a few thousand rupees a year.

But the real test comes when you make a claim. The moment you are hospitalized, these limits and co-payments start applying. What looked affordable at the time of purchase can end up costing you lakhs from your own pocket, even though you technically had health insurance.

To understand what this balance looks like in practice, here’s a comparison of monthly costs across different age and family profiles:

Note: The listed premium ranges are for a ₹15 lakh sum insured for people residing in Delhi. These are illustrative figures that can change as per the insurer’s medical underwriting. 

It is important to know that not every health plan offers the option to pay premiums on a monthly basis. Besides, if you pay your premiums monthly and raise a claim during the policy term, the pending monthly premium payments for the year will immediately become due and be deducted from your claim amount.

At Ditto, we recommend paying premiums on an annual basis. It helps you save more over time. Yearly payments also reduce the risk of missing due dates or lapsing your policy. Paying annually can help you save 5–10% on premiums. 

Alternatively, you can invest in a systematic investment plan (SIPs) or a recurring deposits (RDs) monthly. The interest you earn from them and the principal can be used to pay your annual insurance premiums, which makes payments easier and more manageable.

Tips To Choose Cost-Effective Plans: Ditto’s Take

• Opt for multi-year premium payments to lock in lower rates, avoid frequent price hikes, and protect yourself from inflation.
• Use wellness and active lifestyle discounts offered for regular health checkups or fitness tracking.
• Choose aggregate deductibles carefully to reduce premiums without risking high out-of-pocket costs.
• Pick a family floater plan when family members are young and healthy, as it is often cheaper than separate individual policies.
• Avoid over-insuring, but make sure your sum insured is enough to handle rising hospital costs in your city.

Note: A sum insured of ₹15 – ₹25 lakh is recommended (as it strikes the correct balance between affordability and adequate medical protection), with higher cover based on family size, city of residence, and affordability. Keep in mind that premiums for higher sum insured do not rise proportionately, making larger covers relatively cost-effective.

Why Choose Ditto for Health Insurance?

At Ditto, we’ve assisted over 8,00,000 customers with choosing the right insurance policy. Why customers like Pallavi below love us:

• No-Spam & No Salesmen
• Rated 4.9/5 on Google Reviews by 15,000+ happy customers
• Backed by Zerodha
• Dedicated Claim Support Team
• 100% Free Consultation

Confused about the right insurance? Speak to Ditto’s certified advisors for free, unbiased guidance. Book your call now or chat over WhatsApp, slots fill up fast!

Conclusion

By comparing plans carefully, choosing coverage based on your real medical needs, and using smart cost-saving options, you can get strong health insurance without overspending. Just don’t pick a plan only because it’s cheap on paper. The true value shows up when you make a medical claim.

If you are looking for a health policy, you can explore our comprehensive health insurance plans for 2026 to compare options and choose what suits you best. Learn more about how we evaluate health plans through Ditto’s Cut.