Health insurance is one of the most important financial protections you can buy in India, especially with rising medical costs and increasing lifestyle-related diseases. Yet, millions of Indians purchase health insurance without fully understanding the terms, benefits, or limitations — often leading to denied claims, unexpected expenses, or insufficient coverage.
In this article, we highlight the top 7 common mistakes Indians make when buying health insurance and how you can avoid them.
1. Choosing the Cheapest Plan Instead of the Right Plan
Many people make the mistake of buying the cheapest policy, thinking all health insurance plans work the same. Unfortunately, low premiums often come with:
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Limited hospital networks
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High co-payment clauses
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Restrictions on room rent
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Lower coverage
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Longer waiting periods
How to avoid this:
Compare plans based on benefits, coverage, CSR, and hospital network — not just the price.
2. Not Checking the Cashless Hospital Network
Most Indians only realize the importance of a cashless network during an emergency. If your preferred hospital is not on the insurer’s list, you may have to pay upfront and claim reimbursement later.
How to avoid this:
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Ensure major hospitals in your city are part of the insurer’s cashless network.
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Check the latest network list each year, as hospitals may be added or removed.
3. Ignoring Pre-Existing Disease Waiting Periods
Health insurance policies in India have waiting periods for pre-existing illnesses, typically 2–4 years. Many policyholders misunderstand this and assume coverage starts immediately.
How to avoid this:
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Understand the waiting periods clearly
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Choose insurers offering lower waiting periods
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Buy insurance early — before lifestyle diseases develop
4. Choosing Insufficient Sum Insured
A common mistake is selecting low coverage like ₹2–3 lakh, which is no longer enough in today’s medical environment. A single hospitalization in a metro city can easily cross ₹4–6 lakh.
How to avoid this:
For families, aim for ₹10–20 lakh sum insured or consider super top-up plans to increase coverage affordably.
5. Not Reading Sub-Limits and Hidden Restrictions
Many policies include sub-limits that cap the insurer’s payment. These can significantly reduce the claim amount.
Common sub-limits include:
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Room rent limits
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Capping on specific treatments
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Limits on ambulance charges
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Maternity expense limits
How to avoid this:
Choose plans with no sub-limits or minimal restrictions — especially for room rent and major treatments.
6. Forgetting to Add Important Riders
Health insurance riders provide extra protection, but many buyers skip them because they want lower premiums.
Useful riders include:
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Critical illness rider
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Hospital cash benefit
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Personal accident cover
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No-claim bonus (NCB) booster
How to avoid this:
Add riders that match your lifestyle needs, age, and risk factors — especially if you have a family history of major illnesses.
7. Not Disclosing Medical History Honestly
Many Indians hide pre-existing conditions like diabetes, hypertension, or smoking habits, thinking it will reduce the premium. In reality, this leads to:
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Claim rejection
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Policy cancellation
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Loss of all premiums paid
How to avoid this:
Always give accurate and honest health information during the application and medical check-up.
Bonus Mistake: Buying Health Insurance Too Late
Most Indians wait until they get older or fall sick before buying health insurance. However, premiums rise significantly with age, and illnesses diagnosed later may not be covered.
Best practice:
Buy health insurance in your 20s or early 30s to get:
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Lower premiums
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Better coverage
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Shorter waiting periods
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Higher approval chances
Conclusion
Buying health insurance is a long-term financial commitment and requires careful consideration. By avoiding these common mistakes, you can ensure your policy truly protects you and your family during medical emergencies.
To summarize:
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Don’t buy the cheapest plan
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Check hospital networks
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Understand waiting periods
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Choose adequate sum insured
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Avoid policies with strong sub-limits
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Add useful riders
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Disclose all medical information honestly
Making informed decisions today ensures your family stays financially protected tomorrow.