Health Insurance – The Complete Guide

In today’s busy and chaotic world, there’s no telling when a disease or an ailment can strike. It is crucial that you get a good Health Insurance that covers you during bad times. In this guide, you can learn everything that you need to know about Health Insurance.

If there’s anything COVID-19 has taught us, it’s that health is indeed the greatest form of wealth and nothing else matters if you’re not physically and mentally healthy. Just because you are healthy now, there is no guarantee that things will be the same several years down the line. In many cases, genetic conditions and cardiac issues manifest only much later in life. 

Why do we need health insurance? Good health insurance protects you and helps you meet your financial needs during these difficult times. India is one of the least insured countries in the world, with a health insurance penetration rate of only 20%. A huge population with a lack of access to financial resources, information, credit cards and low credit score is one of the reasons why so many Indians don’t have health insurance. 

Read on to find out all you need to know about health insurance and why it’s the most important thing to invest in for your future. 

Chapter 1: What is Health Insurance?

Health insurance is a type of insurance that covers the cost of an individual’s medical, surgical and in some cases, even dental expenses. Health insurance can either reimburse the insured individual for expenses incurred or pay the hospital or caregiver directly. 

What is the need for health insurance? 

The importance of health insurance cannot be stated enough. With a rapidly changing lifestyle and exposure to all kinds of diseases, you are constantly susceptible to illnesses.

Here are the reasons why you need to buy a health insurance in India and why health insurance is so important:

  1. Affordability: If you’re below 30 and are considering buying health insurance, now is a great time to do so! At 25, if you’re paying a premium of Rs. 3000, you will have to pay twice the amount at 35 and even more at 45! That is because you are in a low-risk category when you’re younger. So, buying a long term insurance plan at a low premium will help you meet future requirements, in case the need arises.
  1. Employee cover is not enough: If you are a working professional, your company will usually provide you with insurance cover. This may go upto a lakh or two but hospital bills far outweigh this amount. If due to unfortunate circumstances, you need to undergo major surgery, this amount will definitely fall short. You can opt for company health insurance, but additional long term insurance to meet unforeseen medical circumstances is why health insurance is important
  1. Increase in lifestyle-related diseases: It’s not uncommon to hear a 35-year-old getting a cardiac arrest or a stroke. Due to a sedentary lifestyle and high-stress jobs, there has been a significant rise in disorders such as heart attacks, stroke, cancer and respiratory diseases off-late. This is another reason why health insurance is important
  1. Rising costs: Private hospitals are charging more and more even for the simplest medical procedures these days. Even a day’s hospitalization can cost you upwards of 50K. People who are not insured end up using their savings which puts them into deep trouble because they are unable to plan for other financial obligations.
  1. Covers additional expenses: Health insurance in India covers much more than hospitalization. It includes smaller procedures and even maternity care. Some packages even cover dental and physiotherapy. It all depends on the plan you choose. 


Difference between health insurance and Mediclaim

Mediclaim is a type of policy that covers only specific illnesses and accident-related treatments. It covers hospitalization expenses for specific illnesses and injuries caused by accidents. For example, if you suffer a broken hip from a road accident, you are eligible for Mediclaim. 

Health insurance is a better investment because it is far more comprehensive than Mediclaim. Often you will incur a lot of additional expenses along with hospitalization as well. Only a health insurance plan will cover these expenses. 

Now that you know what is health insurance and why do we need health insurance, read on to know the different types of health insurance in India.

Chapter 2: Types of Health Insurance

There are several different types of health insurance to choose from, depending on your needs. Here are the different health insurance plans in India:


  1. Individual Insurance plans: The most popular type of medical insurance, the individual insurance plan covers hospitalization and surgical procedure charges completely for an individual. You cannot use this plan for your family or close relatives. The premium amount will depend on several factors such as your age, medical history, risk factors, annual income etc. You can claim up to the basic sum insured. The younger you are, the better it is to get this type of health insurance
  1. Family Floater Insurance plans: As is quite obvious, this is a type of health insurance for family. The advantage is that each family member does not have to individually take a separate plan. However, the premium as well as sum assured is usually higher because the amount is split among different family members. But it definitely works out cheaper than an individual plan. 
  1. Senior Citizen Insurance plan: The senior citizen plan, as the name suggests, is exclusively for people who are above 60 years of age. Since old people are more susceptible to illnesses, they have to pay a high premium to avail this type of health insurance. Generally, people are expected to undergo medical screening to be eligible for medical insurance, but senior citizens are excluded from this category because with old age, comes a greater probability of diseases. Health insurance for senior citizens is a very good plan if you have aged parents or grandparents at home. 
  1. Critical illness insurance plans: If you or your family member has a history of chronic illness such as cardiac issues, cancer, diabetes or other such serious ailments, this type of medical insurance is ideal. You can choose from diabetes insurance, heart insurance, cancer insurance etc. Here, the insurer gets a lump sum amount at the time of claiming the money. You are eligible to receive money even without hospitalization because a large part of the treatment for some of these disorders don’t require hospital admission. 
  1. Accident insurance plans: As the name suggests, this type of health insurance protects you after you have met with an accident. It includes immediate treatment against partial disability, total disability and even death. 
  1. Unit Linked Health Insurance: These are basically unit as well as insurance plans that come with a dual benefit of investment as well as insurance. A portion of the premium is invested in the stock market and based on market performance, the insured is offered the final sum.
  1. Maternity Insurance: If you are expecting a child anytime soon, it’s a very good idea to go for maternity health insurance. It will take care of all prenatal as well as postnatal costs. Furthermore, you can all extend the plan to a baby cover, wherein the expenses for the new born baby are also covered to a reasonable extent. 

There are essentially the main types of medical insurance in India. You can choose any of the above based on your requirements, even if you don’t have a credit card!

Chapter 3: Health insurance vs life insurance

A common question people have while taking insurance is, what is the difference between health insurance and term insurance

What is a term insurance?

A term insurance is a type of insurance wherein the family of the insurer receives a lump sum amount after the insurer’s demise. It’s a way to make sure your family is financially secure after your death. While taking a term insurance, you need to nominate beneficiaries who will be entitled to the amount when the time comes. 

Why take term insurance?

Term insurance plans have the lowest premiums compared to all other types of insurance. A term insurance is very useful and an absolute must have for several reasons. Taking term insurance at a young age goes a long way in securing your family’s future. It provides for your children’s education, wedding, any debts you may have and other such expenses. Basically, after your demise, your family is free to use that money for various purposes. 

Health insurance on the other hand, as you now know, covers only medical and hospitalisation expenses. Here’s a table which clarifies the health insurance vs life insurance confusion:

Health Insurance 

Life/Term Insurance 
Designed to take care of medical and hospitalization expenses of you and your family members, in case they’re part of the plan.  Designed to take care of your family AFTER your demise. Your family will receive a lump sum as a single payment after your death. They can use it for various purposes. 
Premiums are higher than life insurance  Premiums are the lowest among all types of insurance 
There is no maturity benefit, except during the end, where the premium along with interest is returned after the demise of the policy holder.  In health insurance, you cannot recover money invested in premium amounts. If the insured meets with an untimely death, then you don’t receive any lump sum amount because there’s no life cover. 
You as well your family members’ paid premiums are exempted from tax implications under section 80D of the income tax act.  You receive a tax exemption under section 80C upto Rs. 1.5 lakh. The final amount you receive is tax free under section as well. 


Do you need both?

Life insurance and health insurance are very different from each other as you can see. Ideally, yes it is a good idea to have both, because you get security against not only untoward medical emergencies but also against an untimely demise after which your family can remain financially protected. 

Now that you are fully aware of the difference between health insurance and term insurance, talk to an insurance expert and decide how you can take both, without burning a hole in your pocket!

Chapter 4: How does health insurance work?

In this section we will talk about various aspects of health insurance that will give you a complete idea on how health insurance works. 

  • Eligibility Criteria
  • Documents Required
  • Process to get a Health insurance
  • Claiming Health Insurance


Eligibility criteria: You need to be at least 18 years of age to be eligible for health insurance. The maximum age to get yourself insured is 65 because as you grow older, the risk also increases. So companies don’t allow you to take a health insurance policy beyond 65. However, if you are above 65, you can still take a policy for your family and help secure their future. The family members include your spouse and dependent children mainly. 


Documents required: Below are the documents that are usually enough to get you a health insurance coverage.

  1. Age proof – Licence, Birth certificate etc
  2. Address proof – Passport, Aadhar card or any other such proof
  3. Identity proof – DL, passport, aadhar, PAN etc
  4. Passport size photo
  5. Medical history certificate – if applicable 


Process to get health insurance: 

  1. The first step is to decide what kind of health insurance best suits your needs and which company to choose health insurance from. Think about whether you want an individual plan, family plan, maternity plan or any other plan among the range of options available. You can buy insurance both online and offline Just go to the insurance provider’s website and fill in your details. 
  2. After filling in details, you will be asked to choose from different premium options and the terms and conditions under each option. 
  3. Fill in other details which include date of birth, medical history of any illness, current medical conditions etc with complete transparency. 
  4. Based on the details submitted you may be asked to undergo a medical examination. You will then have to submit those reports and wait for the insurance company to give the final approval. The younger you are, the easier and faster it is to get insured.  In India, people under 45 do not have to undergo a mandatory health checkup while opting for health insurance. However, if you have any pre-existing health conditions, such as diabetes or hypertension or any other chronic illness, you are supposed to disclose the same. It is advisable that you go through a health checkup when you take a health insurance plan so that you can avoid any claim rejections if you find out about your pre-existing illness after you have taken the health insurance policy.


Claiming health insurance:

  1. To avoid the cashless claim insurance facility, the insured needs to be admitted in a partner hospital. You need to provide the relevant insurance documents and present an E-card as proof of insurance in order to be eligible for hospitalization under the insurance. 
  2. Post treatment, the medical bills and related expenses are directly sent to the insurance provider who will settle the final bill on your behalf. 
  3. The procedure for claiming insurance varies between planned and emergency hospitalization. If it’s a planned procedure, you need to update your insurance provider well in advance, about 4-5 days early so that they have enough time to process the claim request. You need to submit a cashless claim form to the insurer beforehand. On the day of the treatment, simply show the card to the hospital and the rest will be taken care of by the insurance provider. 
  4. The procedure for cashless emergency treatment is slightly different. You can immediately contact the customer care team of the insurance company and make your last minute request. The hospital sends the cashless claim form to the insurance provider following which the insurance company will authorize the admission. After that you are free to continue with the procedure smoothly. 

Here’s what you need to claim health insurance:

  • Claim form with all your details
  • Medical certificate signed by the doctor
  • Discharge card stating summary of treatment
  • Billing receipts from hospital
  • Prescriptions
  • Investigation report
  • FIR if its an accident

These are essentially the steps and guidelines involved if you’re wondering about how does the health insurance work


Talk to your health insurance provider and discuss all of the above with him/her. Make sure you have all your documents ready beforehand. Finish up your health check up, if required. Once you sign up for a good health insurance policy, you’ve taken the first step towards securing a happy future!

Chapter 5: How to choose the best health insurance plan ?

Choosing a health insurance plan which protects you and your family well if the time arises, is critical. However, if you search for the best health insurance plan, the internet will throw up a range of options. It’s extremely confusing and you’re not sure how to make the final decision. Here are a list of guidelines to keep in mind to help you choose the best medical insurance policy:

  1. Look for the right coverage: Firstly, make a list of your medical requirements. Each health insurance plan is different and must cater to your individual-specific needs. A good health insurance policy will cover a wide range of expenses and provide medical support across a wide range of problems. It must cover pre and post hospitalization, ambulance expenses, critical illness cover, maternity and childbirth cover (if applicable), transportation, cashless treatment, daily hospital cash benefit, etc. Read the policy features in utmost detail. If you have trouble understanding insurance jargon, consult an expert to help you. This is essential because you should not face any trouble while claiming your coverage in unforeseen circumstances.
  1. Evaluate your affordability: Yes, it is important to choose the best health insurance plan that covers all expenses, but if it burns a big hole in your pocket, paying high premiums will be stressful for you. If your income is on the lower side, it’s okay to start small. Even the most basic plan will do in the beginning, especially if you buy a plan when you’re younger. You can always upgrade your plan as you financially progress in life. 
  1. Choose family over individual plans: When looking for the best health policy, it’s always advisable to buy a plan that caters to the whole family because you can experience maximum benefits at a much more affordable price.  If you are planning on having a family someday, choose a plan which can be upgraded to a family coverage plan. 
  1. Check waiting period: In most cases, health insurance plans cover specific conditions such as hernia, cataract or other smaller procedures after a specific waiting period. This depends on the plan you choose. A plan which covers maternity cover can also be claimed only after a few years. Check the waiting period well before you choose the best medical insurance policy for you and your family. 
  1. Choose a lifetime renewable plan: In all probability, you will require health insurance in the later years of life. So choose one which provides you financial support when you need it the most.
  1. Carefully check the co-payment clause: Co-payment is how much you will have to pay and how much the insurer will pay to meet medical expenses. For example, if the clause is 15% out of 1 lakh, you will have to pay Rs.15000. Lower the co-payment amount, better is the health insurance policy.
  1. Hospital coverage: Insurance companies tie up with hospitals to make the process as hurdle-free as possible. In case of hospitalization, you simply need to submit your insurance papers and the hospital will take care of the rest. Make sure the insurance company has tie ups with all the major hospitals in the city or any other hospital of your choice. Connections with well-known hospitals also highlight the credibility of the insurance company.
  1. High claim settlement ratio: It is the number of claims that can be settled by the insurance provider by the total received claims. A high settlement ratio is always ideal. The best health insurance plan provides a high claim settlement ratio. 

Keep these guidelines in mind while choosing the best healthy insurance policy for you and your family.

Chapter 6: How to finance health insurance?

All of us want to stay healthy, but for many of us, to buy health insurance is still a big question mark. It’s a distant dream which falls outside our financial capabilities. So, we don’t realise the need to invest in our futures and leave our chances to fate. Often, when a medical emergency strikes, it strikes hard and drains our pockets completely.

What makes it so hard to get health insurance?

  1. Low income levels: If you have a low income which can barely support the day to day needs of you and your family, anything that falls outside the purview of these expenses seems irrelevant. Even if you want to buy health insurance you can’t, because basic expenses eat up your entire income. 
  1. High premiums: Health insurance policies often have high premiums, which makes it very difficult for people to afford health insurance. Premiums are also dynamic so far as they can significantly increase over a period of time. For people who are struggling with even basic premium amounts, a spike is undoubtedly unwelcome. 
  1. Cumbersome process: Buying health insurance can be a long-drawn complicated process. People simply don’t want to get involved in this intricate process. 
  1. No 100% cashless options: Not all insurance policies are 100% cashless. In most cases, people have to pay a portion out of their pockets. Due to delays in cashless insurance approvals by hospitals, you may be asked to pay up at the hospital. This puts you in a financially stressful situation.
  1. Lack of clear communication: This is a problem a lot of people face with insurance companies. Insurance companies make you wait for extended periods of time and make the process much more complicated if you have had prior medical conditions. Excluded medical clauses are also an issue. You may be unfairly excluded from bone treatment if you have had a major fracture, for example.


Among the several problems mentioned above, affordability remains the biggest issue of all with several people who simply cannot prioritize health insurance because they simply can’t pay for it. While this sounds like a rather helpless situation, there’s always a silver lining. Health insurance doesn’t have to be unaffordable anymore thanks to no-cost EMI health insurance options. But is it actually possible to buy health insurance on EMI?
With ZestMoney it very much is! 


What is Zest Money? ZestMoney is a platform that aims to improve the lives of 300 million Indians who don’t have access to a range of financing options due to a lack of credit cards or credit history. ZestMoney uses mobile technology, digital banking and artificial intelligence to make financial transactions happen to enable people to make a wide range of purchases using no-cost EMI options


Why buy health insurance with ZestMoney? Health insurance doesn’t have to be a distant dream anymore. If you don’t have a credit card, have a low cibil score or cannot pay large premiums upfront, don’t worry. With ZestMoney’s card-free, no-cost EMI health insurance options, you can pay for health insurance in interest free EMIs without emptying your bank account. 


How can you use ZestMoney? Here’s what you need to know to buy health insurance on EMI without credit card

  • You need to an Indian citizen and 18+ years old
  • You need a bank account and KYC details
  • Upload this information along with KYC on ZestMoney website
  • Zest evaluates your data and gives you a credit limit
  • Use that credit to buy health across across Zest Insurance partners 
  • Pay back in no-cost EMI in 3,6,9 or 12 months based on your convenience 

It’s simply as simple as this! Health insurance on EMI is the best and cheapest way forward!

Chapter 7: Health insurance tax benefits

Health insurance is one of the best ways to save on tax. It provides you with substantial tax exemption under section 80(D) of the Income Tax Act, 1961. If your annual income is liable for taxation, then you are eligible for medical insurance tax benefits

  1. As a working individual, you are entitled to a tax deduction of up to Rs. 25,000 for self, spouse and dependent children. 
  2. You can deduct upto Rs.5000 for preventive health check ups. 
  3. For single premium health insurance policies, you get a tax deduction for a fraction of the amount. The amount is calculated by dividing the lump sum amount paid by the number of years. 
  4. Under HUF(Hindu Undivided family) provision of the income tax act, you are eligible for tax deduction upto Rs. 25000


For senior citizens:

  1. Under 80D tax exemption, you can avail tax benefits for both yourself and your parents, irrespective of whether your parents are dependent on you or not. 
  2. You can avail a tax exemption on health insurance of upto Rs.80000 as well as for your parents, provided that you are under 60 years of age. 
  3. If you are 60 or above and are still paying premiums for your aged parents, you can get a tax exemption for upto 1 lakh. 
  4. You can avail upto Rs.5000 for preventive health checkups of parents who are above 60. 
  5. If you are 60+ and your parents are 80+, and you take care of their preventive health checkups, you are eligible for tax exemption upto Rs. 1 lakh. 

You get so many tax benefits when you take health insurance! However, don’t choose an insurance plan based on tax benefits alone. The first and utmost priority is always your health insurance coverage. Nothing should compromise that. 


We hope this guide has helped you get a sound understanding of the nuances of health insurance and why it’s so important to purchase a policy for you and your family. Remember, if you’re not healthy, nothing else is possible.With platforms such as ZestMoney, even your financial situation is taken care of! 

It’s time to prioritize your health and plan for your future. Invest in health insurance and enjoy a secured future today! 

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