Quick Overview
Since there are about 7 types of health insurance plans in India, choosing the most suitable one can be quite confusing. To help avoid this confusion, we have explored the different types of health insurance plans in India that are most commonly available. We will also explain which plan suits which category of people better so that you can make an informed decision.
Types of Health Insurance Plans
While many people categorize plans by who they cover, the Insurance Regulatory and Development Authority of India (IRDAI) fundamentally classifies health insurance into two primary categories: Indemnity-based plans and Benefit-based plans.
Indemnity plans reimburse the actual expenses incurred during hospitalization, while benefit-based plans pay a lump sum amount upon the diagnosis of a specific condition or event, regardless of the actual hospital bill. Within these categories, we can further classify the 7 types of health insurance plans in India available today.
1. Indemnity-Based Plans
Indemnity plans are what most people refer to as "standard" health insurance. They cover your hospital bills, doctor fees, and medicines up to the sum insured.
Indemnity-Based Plans
Individual Plans & Multi-Individual Insurance Plans
An individual health plan covers a single person. If you buy a plan for ₹5 lakhs, that entire amount is dedicated to your treatment only. A "Multi-Individual" plan is a variation where multiple family members are covered under one policy document, but each has an independent sum insured. Claims by one member do not reduce coverage for others. These are among the most reliable types of health insurance plans for those with specific health risks.
Family Floater Plan
It covers your family (usually spouse, children, and sometimes parents) under one shared sum insured. Any member can use the coverage but the total claims in a policy year cannot exceed the sum insured. It is cost efficient for young families. You must choose a high enough sum insured so that multiple claims do not exhaust the cover. Family Floaters are easy to manage because you handle one policy, one renewal date, and one premium payment instead of tracking multiple individual policies.
Example: HDFC ERGO Optima Secure can be taken as an Individual, Multi-Individual, or Family Floater plan.
2. Benefit-Based Plans
Unlike indemnity plans, these pay a fixed amount to the policyholder, providing a financial cushion during recovery.
- Critical Illness Insurance: Critical illness plans are essential if you have a family history of serious illness. If the insured is diagnosed with a life-threatening disease listed in the policy (like cancer, kidney failure, or stroke), the insurer pays a lump sum once and thereafter the policy usually terminates. This money can be used for advanced treatment, paying off debts, or replacing lost income.
Example: Aditya Birla Activ Secure Critical Illness Plan - Personal Accident Cover: Personal Accident insurance provides a lump sum payout in case of accidental injury, disability, or death. It does not cover illnesses. While health insurance covers accidents from Day 1, this plan protects your income if an accident causes temporary or permanent disability. Many insurers offer it as an add-on, but it remains a benefit-based cover.
Example: Niva Bupa Personal Accident Insurance - Hospital Cash: This type of plan pays a fixed daily amount for every day you are hospitalized, regardless of your actual hospital bill. This amount helps cover non-medical expenses such as food, travel, or income loss. Hospital cash is available as both a standalone policy and an add-on.
Example: Star Hospital Cash Insurance
Plans Based on Specific Life Stages and Needs
Senior Citizen Health Insurance
Designed specifically for those aged 60 and above, senior health plans cater to the higher medical risks associated with old age. They offer shorter waiting periods for pre-existing diseases. Many include mandatory co payment clauses. You should check room rent limits and sub limits carefully. These types of health insurance plans are useful when standard comprehensive plans become unavailable due to age. Among the different types of health insurance plans this one needs the most careful fine print reading. Example: Star Red Carpet Senior Citizen Plan
Maternity Plan
Maternity coverage pays for delivery expenses and related care such as pre- and post-natal treatment. Most standard health insurance plans exclude maternity coverage by default. Maternity-focused plans offer this benefit either as an inbuilt feature or as an add-on, with waiting periods and sub-limits on delivery expenses. These plans work best when bought early and are time-sensitive within the 7 types of health insurance plans. Example: Niva Bupa Aspire, Aditya Birla Activ Fit Preferred
Top-up and Super Top-up Plans
Top Up and Super Top Up plans increase your coverage at a low cost and activate once your medical expenses cross a chosen deductible. A Top Up plan works on a per-claim basis, meaning it triggers only when a single hospital bill exceeds the deductible. If expenses are spread across multiple hospitalizations, it may not pay at all. A Super Top Up, however, works on an aggregate annual basis. It considers the total claims made during the policy year, and once this cumulative amount crosses the deductible, the plan starts paying. This makes Super Top Ups more practical and widely preferred today. Example: HDFC ERGO Medisure Super Top-up, Care Supreme Enhance Super Top-up
Group health insurance is commonly provided through employers, banks, alumni associations, or other member-based groups. These plans are usually cheaper and easier to get than individual policies, but coverage ends when you leave your job. Learn more in our detailed guide.
Why Approach Ditto for Health Insurance?
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Confused about the right insurance? Speak to Ditto’s certified advisors for free, unbiased guidance. Book your call now or WhatsApp us.
Which Type of Plan is Best Suited for You? Ditto’s Take
Choosing from the 7 types of health insurance plans depends on your life stage and health profile. There is no single best plan for everyone. The right choice is the one that fits your needs today and still works years later.
- Individual Plan: An Individual plan works best if you have pre-existing conditions, are a senior citizen, or belong to a family with very different health risks. Each person has a separate policy and sum insured. One member’s claims or age never affect another’s premium or benefits. This offers maximum control and stability.
- Family Floater Plan: A Family Floater suits young families with a spouse and dependent children. It is better to avoid adding senior parents. The premium depends on the age of the oldest member. Pre-existing diseases in parents can also push premiums higher and reduce value.
- Critical Illness Plan: A Critical Illness plan is useful if you have a family history of serious diseases or face difficulty getting regular health insurance due to major pre-existing conditions. It pays a one-time lump sum on diagnosis of a listed illness, helping manage treatment costs and income loss. For better value, we generally recommend opting for a critical illness rider with your term insurance plan.
- For Enhanced Protection: Super Top Ups help you increase coverage to ₹50 lakhs or even ₹1 crore at a low cost. You must choose a deductible that matches your base health insurance sum insured. Remember that a super top up shouldn't replace your base plan, it's meant to complement the base plan.
Before choosing any plan read the policy brochure and wording carefully. Check what the policy covers and what it excludes. Understand sub-limits, co-payments, and room rent restrictions. Choose plans with fewer limits, strong restoration benefits, and bonuses. Make sure to renew your policy on time to maintain continuous coverage and review your plan every 4–5 years to ensure it still meets your needs.
Disclaimer: This article is for informational purposes only and should not be considered professional or financial advice. Health insurance needs vary by individual. Please consult a licensed insurance advisor to evaluate which plans and coverage options are most suitable for your requirements. This article features certain insurers and plans that are partner insurers of Ditto. To understand how we evaluate and recommend plans, please refer to Ditto’s Cut.
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