Types of Health Insurance: An Expert’s Guide

Have you ever forgotten to take an umbrella on a rainy day? Not having health insurance is just like that. You don’t realize how important it is until you need it. With rising medical costs, having health insurance is no longer a luxury but a necessity. However, if you’re new to the world of insurance, you might be wondering, how many types of health insurance are there? or which one is right for me? Don't worry, this simple guide has got you covered.

This article will break down the different types of health insurance to help you choose the right type of health insurance perfect for your needs.

Confused about which plan best suits your requirements? While it’s crucial to do personal research, we at Ditto are dedicated to providing you with solid insurance advice. Book a call with us today and let’s find you the best plan for all your needs. 

Best Health Insurance Plans in 2025

Choosing the right health insurance policy can be overwhelming, especially given the numerous options available. However, some plans stand out due to their comprehensive coverage, affordability, and benefits. Here’s a look at the top health insurance plans in 2025:

Quick Glossary:

• PED Waiting Period: Time before pre-existing diseases are covered; add-ons can reduce this.
• SI Waiting Period: Time before sum insured benefits apply.
• Restoration: Refers to the reinstatement of the sum insured after utilization.
• Renewal Bonus: Increment in coverage for every claim-free year.
• CSR (Claim Settlement Ratio): Percentage of claims settled by the insurer.
• ICR (Incurred Claim Ratio): Percentage of premium used for claims.

What is Health Insurance?

Before we get into the types of health insurance plans, let’s first understand what health insurance actually is. Put simply, health insurance is a contract between you and an insurer. You pay a set amount (premium), and the insurer covers your medical costs based on your chosen policy and coverage, protecting you from the financial burden of high medical bills.

The Importance of Health Insurance

Having learnt what health insurance is, let us now understand why it’s important. Even now, most people still depend on out-of-pocket payments for medical care but that can strain your finances. The proper types of health insurance plans can avoid financial stress and ensure access to quality healthcare. With healthcare expenses going through the roof and sudden medical emergencies on the rise, it is crucial to have a good health insurance plan. 

How Many Types of Health Insurance Are There?

Health insurance policies can be categorized into various types based on coverage, eligibility, and benefits. Let’s explore the types of health insurance in detail.

1. Individual Health Insurance

This is the most basic type of health insurance plan, covering only one person. If you buy an individual policy, the sum insured (the maximum amount the insurer will pay) is dedicated solely to you. 

Best For:

• Young professionals
• Individuals who want exclusive coverage
• People with specific health concerns

2. Family Floater Health Insurance

Consider this a family Netflix plan for your family's healthcare bills. A family floater policy insures several members of the family under one policy, with an overall sum insured that any insured person can avail. As the sum insured is shared among all covered members, if one person exhausts the total amount, other members might not be able to use the policy.

Best For:

• People looking for cost effective coverage for the entire family
• Families with spouse, kids, and dependent parents
• Young couples planning for a family

3. Group Health Insurance

This is the type of health insurance coverage offered to a group of people who are related in some way like employees, bank customers, college alumni groups, etc. As it is compulsory for employers to provide this, it is usually more affordable and sometimes even free for employees. For policies linked to your employment, coverage might end when an individual leaves the job. However, some group policies offer an option to convert to an individual plan after leaving the organization. 

Best For:

• Employees working in companies. 
• Individuals who are unable to get a personal health insurance due to their medical history

4. Critical Illness Insurance

Regular health insurance may not be enough to cover serious diseases like cancer, kidney failure, or heart attacks. Critical illness insurance provides a lump sum payout if the insured is diagnosed with a critical illness covered by the policy. Traditional health insurance covers treatment costs, while critical illness policies provide a lump sump payout. This payout can help manage lifestyle expenses or act as an income replacement. 

Best For:

• Individuals with a family history of critical illnesses
• Sole Breadwinners who need financial security in case of serious health conditions

Friendly Reminder: Critical illness coverage is better to consider as a rider with term insurance due to a better cost structure, making it more financially prudent than opting for it as a health insurance.

5. Top-Up and Super Top-Up Health Insurance

These plans work as additional coverage if your existing health insurance is exhausted. A deductible is the threshold amount you must pay out-of-pocket before the policy kicks in. The key difference between the two is how this deductible applies

• Top-up Plan: It covers medical expenses only once per claim after the deductible is met. If a single hospitalization bill exceeds the deductible, the policy covers the remaining amount. However, multiple smaller claims within the year won’t be covered unless each individually crosses the deductible. 
• Super Top-up Plan: It considers the total medical expenses over a year rather than per claim. Once your total medical expenses exceed the deductible, the plan starts covering subsequent claims, making it more beneficial for those with frequent hospital visits. 

Best For:

• People with existing health insurance looking for extra coverage at a reasonable cost
• Those who want to manage medical costs without increasing the base policy

Other Types of Health Insurance Plans in India

These plans can be used as ad-ons to the specific policies.

1. Senior Citizen Health Insurance

Medical expenses tend to increase with age, making this policy essential for older adults. These plans are designed specifically for individuals above 60 years of age and cover age-related illnesses and other conditions. The caveat here is the higher possibility of deductibles, co-payments, disease wise sublimits. However, this is still a better scenario, as only a small portion of medical expenses would be out of pocket, with the rest being covered by insurance- far better than having no coverage at all.

Premiums for senior citizen health insurance tend to be higher due to an increased health risks associated with aging. Since older individuals have a higher risk profile- with greater chances of chronic illnesses, hospitalizations, and medical interventions- insurers compensate by charging higher premiums to offset potential claim costs. Some policies might even require you to undergo medical check-ups before issuance, and certain age-related conditions may have long waiting periods before coverage begins. 

Best For:

• Individuals over 60 years of age
• Retirees looking for a health safety net

2. Maternity Health Insurance

While bringing a new life to this world can be a joyous experience, it comes with significant medical expenses. From prenatal care and delivery costs to postnatal treatments and newborn care, maternity expenses can quickly add up. While some health insurance plans provide maternity-related coverage, having maternity health insurance as an add-on ensures that you receive the financial support that you deserve.

For choosing the best maternity health insurance plan, you should opt for a plan with a low waiting period if you’re planning to start a family soon. Also look for higher maternity coverage to ensure sufficient financial support and check for newborn coverage from day 1 to cover vaccinations and medical emergencies. 

Best For:

• Couples planning to start a family
• Expecting mothers looking for financial support for childbirth

3. Personal Accident Insurance

While health insurance covers treating costs for accidental injuries from day 1, this policy can be used for additional coverage as accidents can happen anytime, anywhere. Personal accident insurance provides coverage for accidental injuries, disabilities, or even death due to an accident. Unlike regular health insurance policies, these plans do not cover illnesses but provide a lump sum payout in case of accidental disabilities or fatalities. 

Best For:

• People working in high-risk jobs
• Individuals who travel frequently

Public vs. Private Health Insurance in India

Health insurance in India is broadly classified into public (government-sponsored) or private. Each type serves a different purpose, catering to various financial and healthcare needs. Understanding these differences can help you make an informed decision based on affordability, accessibility, and coverage. 

• Public Health Insurance: Includes government-funded schemes like Ayushman Bharat, ESIC (Employee State Insurance Corporation), and CGHS (Central Government Health Scheme), which provide coverage for low-income groups and government employees. These are usually low-cost or free but may have limited hospital networks and longer claim processing times. 
• Private Health Insurance: Offered by private companies with a variety of plans tailored for individuals, families, and businesses. While they offer faster claim settlements and an extensive hospital network, they come at a higher premium cost. 

The choice between public and private health insurance depends on factors like income level, coverage needs, and accessibility to quality healthcare services.

Coverage Details: What’s Included & Excluded?

Before selecting a health insurance plan, it’s important to understand what is typically covered and what is excluded. Policies vary across insurers but most include hospitalization, pre- and post-hospitalization expenses along with illness coverage. However, exclusions like pre-existing conditions (especially during the waiting period,) cosmetic treatments, and non-medical expenses can impact your claim approval.

Let’s take a closer look at what’s generally covered and what’s not:

What’s Typically Covered?

• Hospitalization expenses 
• Pre- and post-hospitalization costs 
• Ambulance charges 
• Daycare procedures 

Common Exclusions

• Pre-existing conditions (waiting period applies) 
• Cosmetic treatments 
• Non-medical expenses like food and toiletries 
• Injuries due to self-harm or substance abuse

Why Choose Ditto to Buy Health Insurance?

Finding the right health insurance shouldn’t feel like decoding a complex puzzle. Unlike most platforms that drown you in jargon and endless policy options, Ditto simplifies the process with:

✅ Unbiased, Human Advice: No spam, no pushy sales tactics—just clear, honest guidance tailored to your needs.
✅ Claim Assistance That Cares: Many insurers vanish after selling a policy. We don’t. Our team helps you navigate claims seamlessly.
✅ Personalized Recommendations: We analyze your lifestyle, budget, and health concerns to match you with the right policy—no generic suggestions.

At Ditto, we’ve assisted over 3,00,000 customers with choosing the right healthcare insurance policy. Why customers like Ankit below love us:

Book a Call with our experts today and get clarity in just 15 minutes! No sales pressure. Just advice you can trust.

Conclusion

Understanding the types of health insurance in India is crucial to making an informed decision. The right health insurance policy will protect you from unexpected medical expenses and give you peace of mind.

Before you choose a plan, compare different policies, check the coverage, and read the fine print. Remember, the best insurance is the one that suits your needs and budget.