5 Lakh Health Insurance

Quick Overview

5 lakh health insurance is a basic, cost-effective option for individuals, covering medical expenses such as inpatient hospitalization and pre- or post-hospitalization expenses in a policy year. Plans providing this sum insured (SI) option offer coverage up to ₹5 lakh per year, but only for the expenses outlined in the brochure. Opting for 5 lakh health insurance is a good starting point. But, it may not be a reliable option due to inadequate coverage, limited long-term security, and out-of-pocket expenses.

India continues to be a lower-middle-income country, with a per capita income of around ₹27,3237 as of 2025. So, individuals may not always prioritize health insurance due to other financial responsibilities. However, it’s important to understand that health coverage plays a key role in ensuring financial security. In this case, the solution lies in starting small since some cover is exponentially better than no cover.

This is where 5 lakh health insurance comes in. Although the amount is considered an affordable starting point, will it protect you as medical costs rise? Let's delve deeper into the details in this guide.

What Does 5 Lakh Health Insurance Cover?

A 5 lakh health insurance plan covers medical expenses up to ₹5 lakh every policy year. This coverage acts as a financial cushion against high healthcare costs, but only for the expenses outlined in your policy. Generally, you’ll be covered for the circumstances like:

Medically necessary hospitalization expenses for accidents, severe illnesses, or planned surgeries
Daycare treatments like chemotherapy, dialysis, cataract surgery, or tonsillectomy
Domiciliary hospitalization
Ayurveda, Yoga, Unani, Siddha, and Homeopathy (AYUSH) Hospitalization Coverage

5 Lakh Health Insurance Premium Calculator

A 5 lakh health insurance premium calculator is an online tool that helps you estimate the premium you'll need to pay for the specific plan you choose. By adding details such as your age, cover amount, pre-existing diseases, and more, you can get a quick estimate of how much your health insurance will cost annually or monthly.

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Best 5 Lakh Health Insurance Plans

Plan Name	Key Features	Insurer Metrics (Avg of 2022-25)	Ditto Policy Score (out of 5)
HDFC ERGO Optima Secure	60-180 days pre- & post-hospitalization; 100% of base SI restoration (once a year); 50% PA, up to 100% renewal bonus (irrespective of claims); 2X coverage from day 1	Network Hospitals: 13,000+, CSR: 97%, ICR: 82%	4.6
Care Supreme	60-180 days pre- & post-hospitalization; unlimited restoration up to base SI; 50% PA, up to 100% renewal bonus	Network Hospitals: 11,400+, CSR: 93%, ICR: 59%	4.5
Aditya Birla Activ One MAX	60-180 days pre- & post-hospitalization; 100% of base SI restoration (unlimited); 100% PA, up to 500% renewal bonus	Network Hospitals: 12,000+, CSR: 96%, ICR: 68%	4.4
Niva Bupa Reassure 2.0 Platinum +	60-180 days pre- & post-hospitalization; ReAssure Forever restoration (after first claim); Booster+ (Carry forward unutilized cover as per entry age up to 10x)	Network Hospitals: 10,000+, CSR: 92%, ICR: 58%	4.3

Here, CSR stands for claim settlement ratio, ICR denotes incurred claims ratio, and PA implies per annum.

For more details, refer to our guide on Best Health Insurance Plans in India 2026.

Now that we have analyzed the best plans, let’s compare sample premiums of 5 lakh health insurance and higher sum insured options for a tier 1 city (New Delhi: 110001). The comparisons are for HDFC ERGO Optima Secure.

Premium Comparison for 5 Lakh Health Insurance

Profile	₹5 Lakh	₹10 Lakh	₹15 Lakh	₹25 Lakh
Individual (25 years)	₹11,791	₹13,367	₹14,130	₹15,419
Family Floater, 2A: Ages (31, 32)	₹18,487	₹21,164	₹22,272	₹24,210
Family Floater, 2A 1C: Ages (35, 34, 5)	₹22,396	₹25,728	₹27,222	₹29,870
Family Floater, 2A: Ages (62, 63)	₹54,925	₹70,415	₹81,829	₹98,082

Here, ‘A’ refers to an adult, and ‘C’ denotes a child.

Key Insight: The above table shows that the price difference between a 5 lakh health insurance plan and other plans with higher sum insured options is quite small. In short, the premiums for a higher SI don't necessarily increase linearly.

Benefits and Drawbacks of 5 Lakh Health Insurance

Benefits	Drawbacks
Affordable Premiums: A ₹5 lakh cover keeps annual premiums relatively low, making it accessible for first-time buyers and those on tight budgets.	Limited Coverage for Major Illnesses: In metro or tier I cities like Mumbai or New Delhi, a single complex surgery can exceed ₹5 lakh, potentially exhausting your cover.
Tax Benefits: Under Section 80D of the Income Tax Act (old regime), you can claim tax deductions of up to ₹1,00,000 (subject to conditions).	Medical Inflation Risk: Rising healthcare costs can make ₹5 lakh insufficient over time, with medical inflation rising by 12-15% annually.
Other Benefits: Offers restoration benefit, no-claim bonuses, s, and add-ons like consumables cover or a free annual health check-up.	Increasing Cover Later Is Difficult: Enhancing the sum insured requires fresh underwriting and approval.
Protection Against Common Medical Emergencies: Covers hospitalizations for accidents, surgeries, and serious illnesses (after applicable waiting periods).	Fresh Waiting Period for Enhanced Cover: Any additional sum insured added later will have new waiting periods.
Cashless Treatment at Network Hospitals: Access to insurer-partnered hospitals where bills are settled directly without upfront payment.	Premium Loading on Upgrade: If health conditions change, insurers may apply higher premiums (loading) while increasing cover.
Good Starting Point for Young Individuals: Works well as an entry-level cover, especially if supplemented by employer insurance.	Feels Like Buying a New Policy for the Extra Cover: Upgrading later often functions like purchasing a separate policy for the additional amount.

Is 5 Lakh Health Insurance Worth It?

Despite the minimal price difference, if you have difficulty affording the premiums for a higher sum insured, a 5 lakh plan isn’t a bad option. However, it may also not be reliable in the long run due to the following reasons:

Difficulty in Increasing Sum Insured: If you get diagnosed with a serious medical condition at a later stage, the insurers may reject increasing the sum insured.
Black Swan Analogy: A health emergency could turn your life upside down without insurance. The most common examples are high-cost medical transplants or treatments like cancer (bone marrow transplant) that impact lives directly.
Medical Inflation: Rise in medical expenses that may happen every 2-3 years. What you consider as a ₹5 lakh cover today will be a mere ₹2.5 lakh a few years later.

Here’s an infographic showcasing the differences between surgical costs in India between the years 2016 and 2025:

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
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Confused about the right insurance? Speak to Ditto’s certified advisors for free, unbiased guidance. Book your call or chat on WhatsApp with us now!

Ditto’s Take on 5 Lakh Health Insurance

Most insurers have a minimum sum insured requirement depending on the location of policy purchase. Tier-1 cities like Mumbai and New Delhi may not offer the option of availing a 5 lakh health insurance plan. Considering the hospital bills, how much they cost today, and how difficult it is to make changes to your policy later, we recommend a health insurance cover between ₹15 lakh and ₹25 lakh instead. Most importantly, a comprehensive cover with features like unlimited restoration of cover and sufficient bonuses will also give you peace of mind in the long run.

Disclaimer

The information in this article is added from publicly available sources and should not be treated as personalized advice. Always read the policy brochures carefully and consult a licensed advisor before purchasing.

We have also discussed Ditto’s partner insurers: HDFC ERGO, Care, Aditya Birla, and Niva Bupa. For more details on how we evaluate and recommend their plans, refer to Ditto’s Cut.

Frequently Asked Questions

Who should opt for 5 lakh health insurance?

First-time buyers who have never had health insurance can opt for a ₹5 lakh coverage plan. These plans are also suitable for young individuals in their 20s and 30s who do not have any major health issues. However, it is always recommended to choose the ideal cover between ₹15-₹25 lakh to avail of long-term benefits.

If health insurance plans offer bonuses and restoration benefits, is ₹5 lakh coverage still enough?

Not always. While features like no-claim bonus and restoration sound reassuring, they are directly linked to your base sum insured. A 50% bonus on ₹5 lakh adds ₹2.5 lakh, while the same bonus on ₹10 lakh adds ₹5 lakh. Since features scale with the base, starting with a higher cover offers stronger protection.

Is there a big premium jump between ₹5 lakh and ₹15–25 lakh coverage?

No. Health insurance pricing isn’t linear. A 100% increase in coverage doesn’t mean a 100% increase in premium. In many cases, upgrading from 5 lakh health insurance to a higher SI may increase premiums only slightly. This makes higher coverage disproportionately more valuable, especially when you consider long-term medical inflation and rising hospitalization costs.

Should I choose ₹5 lakh from a reputable insurer or ₹15 lakh from a lesser-known insurer at the same price?

In most cases, it’s better to choose a reputable insurer. Claim experience, underwriting quality, and hospital network matter more than just the sum insured. A ₹5 lakh policy from a reputed insurer with a strong claims track record is often safer than a higher cover from an insurer with inconsistent claim settlement practices.

Is it better to buy a ₹5 lakh base cover with a super top-up or a higher base cover?

A higher base cover is usually the simpler and safer choice. While super top-ups can reduce premiums, they have deductibles and require coordination between multiple insurers during claims. This adds paperwork, delays, and confusion. A single policy with a higher sum insured offers smoother claims, fewer complications, and peace of mind.

Last updated on: 22 Feb, 2026