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What is Health Insurance - Everything Explained

Why do you need a Health Insurance Policy?

As of 2016, the life expectancy at birth stood at 68.7 years for males and 70.2 years for females. The global average stands at 70 and 75 years, respectively. (1)
Non-communicable diseases claimed approximately 61% of the total deaths which occurred in India in 2017. (2)
Around 224 million people suffer from hypertension in India as of 2017. (3)
Approximately 73 million Indians suffer from type 2 diabetes, which can lead to various medical complications. This number is expected to witness a staggering growth to 134 million by 2025. (4)

What are the Benefits of Health Insurance Plans?

Types of Health Insurance in India

Difference between Health Insurance Vs Life Insurance

While life insurance policy aims to secure the financial requirements of an insured’s dependent family members in the event of untimely death, health insurance scheme gives an individual access to quality health care and treatment facility.

Points of Difference

Health insurance

Life insurance


Cover all medical expenses for treatment and recovery in the event of diagnosis with certain ailments.

Financial protection to the immediate family in case of untimely death.

Amount payable

Up to the sum insured.

Death benefit (upon prematurity expiry of an insured) Lump sum pay-out on maturity

Tax benefits

Health Insurance tax Benefits of up to ₹1Lakh. (Section 80D of the Income Tax)

Tax Benefits of upto 1.5 Lakh per year (Under section 80C of the Income tax Act)

Health Insurance Tax Benefits

If you avail a health insurance policy, you can avail tax benefits under Section 80D of the Income Tax Act, 1961. The table below illustrates the break-up of tax exemptions on your health insurance policy:


Exemption Limit

For self and family (spouse, dependent children)

Up to ₹25,000

For self, family + parents (below 60 years of age)

Up to (₹25,000 + ₹25,000) = ₹50,000

For self and family (where the eldest member is below 60 years of age) + parents (above 60 years)

Up to (₹25,000 + ₹50,000) = ₹75,000

For self and family (eldest member is above 60 years of age) + parents (above 60 years of age)

Up to (₹50,000 + ₹50,000) = ₹1,00,000

What Should You Look for While Availing a Health Insurance Policy?

FAQs about Health Insurance in India