Is Health Insurance still a luxury in India
Why Is Health Insurance Still a Luxury in India?
Health Insurance: Do we ever think about it until life gives us a hard slap in the face? Why are we all not talking about it? Are we aware of the urgency of health insurance? I want to talk about it, and I also want people to understand the urgency of it and realize its importance before it’s too late.
Just think of it this way: A loved one suddenly hospitalized, A treatment we never imagined because we never imagined or thought of our loved ones in a difficult or vulnerable situation, but let’s face the reality, an emergency that wipes out all of our savings in the blink of an eye. That’s when we realize: good health is not guaranteed, and healthcare in India isn’t that cheap either.
Yet, in a country of over 1.4 billion people, why is health insurance still considered optional?
Health Insurance in India: A Reality Check
Despite healthcare costs skyrocketing year after year, over 400 million Indians still don’t have insurance. That’s almost one in every three people walking around without a safety net, no cushion, no backup plan, just hope. According to Forbes Advisor India, around 514 million people were covered under some kind of health insurance by 2021.
But that number, while sounding big, barely scratches the surface, especially when you consider how many seniors, daily wage earners, and rural families are still left out in the cold.
Yes, government schemes exist. But they often come with caps, waiting periods, or limited hospital tie-ups. And when it comes to private health insurance, many see it as this big, complicated, expensive maze. So, they avoid it until it’s too late.
And then? One accident. One surgery. One serious diagnosis. And everything you’ve saved over a lifetime could be gone in a snap.
The True Cost of Falling Sick: It’s More Than Just Bills
On paper, healthcare in India is “free for all.” But step into any hospital and reality hits hard, nearly half (48%) of our country’s health expenses are paid straight from people’s pockets. And this isn’t just some optional spending. This is money scraped together by selling land, gold, taking loans, or dipping into years of hard-earned savings.
Now add chronic illnesses to the mix. Non-communicable diseases like cancer, heart conditions, and diabetes now claim 5.8 million Indian lives every year. These aren’t one-time treatments. They demand regular checkups, lifelong medications, and unexpected emergencies that can burn through lakhs in a matter of days.
And it gets scarier with age.
A 2025 national health survey revealed that the risk of diabetes spikes significantly after 55, especially for men. This isn’t a distant future. This is today. So, in a country where growing old can mean growing sick, shouldn’t health insurance be the first thing we protect ourselves with?
What Does Health Insurance Really Do?
Health insurance isn’t just a policy; it’s peace of mind when life turns upside down. It’s the quiet reassurance that when your health takes a hit, your finances won’t crumble with it. A good insurance plan isn’t about complicated jargon or fine print. It’s about knowing you’re covered when it matters most.
Here’s what a solid health insurance policy does for you:
Cashless treatment at trusted hospitals, so you don’t scramble for funds in an emergency.
Covers pre- and post-hospitalization expenses, not just the days spent in a hospital bed.
Takes care of critical illnesses like cancer, heart attacks, or organ failure, things we hope never happen, but must prepare for.
Supports chronic conditions like diabetes, which require long-term care and costly medications. And yes, you also get annual tax benefits under Section 80D, a small win for planning ahead.
Think about it, this insurance means you never have to choose between life-saving treatment and your child’s education. It protects your present and your future, even when things go wrong.
The Income vs. Healthcare Gap: A Growing Crisis
Let’s face it, what we earn just can’t keep up with how fast healthcare costs are rising.
In 2025, the average Indian brings home about INR 9.4 lakh a year. Sounds decent, until a medical emergency hits. A few days in a private hospital? That’s INR 3 to 10 lakh gone in the blink of an eye.
And that’s just one emergency.
Now imagine this happening to a family with no savings cushion… no backup plan… and no health insurance. The result? A lifetime of debt. Or worse, skipped treatment altogether.
In metro cities like Mumbai and Bangalore, where world-class hospitals charge world-class prices, the situation is even tougher. Many still go uninsured, either because they find the process too complicated, or they believe “it won’t happen to me.”
And in rural India? The gap is even more heartbreaking. Limited access to hospitals, lower incomes, and almost no health insurance coverage. One illness can destroy generations of savings.
Health insurance isn’t a luxury anymore. It’s a survival tool.
Employer Insurance Isn’t Enough
Many employees rely solely on corporate health insurance, but that can be risky:
It usually doesn’t cover your whole family
It ends when you leave the job
Coverage is often limited for serious illnesses
That’s why having individual health insurance is so important, customized for your life stage, medical history, and financial goals.
Digital Shift: Easier Than Ever
There’s good news, too: Health insurance is getting more accessible. I am not here just to discuss the problem, while I am not an expert, but as per my research on this topic, I would want to discuss some solutions:
With more insurers offering policies online, buying insurance is now simple, fast, and paperless. Over 30% of all new health policies in India are now bought digitally.
Features like teleconsultation, wellness benefits, and even mental health support are now built into many plans. This is the future of health insurance: personalized, digital, and holistic.
Lastly, according to me, the EMI option made it easier to avail the insurance as you don’t have to pay for health insurance all at once. Many insurance companies in India now allow you to pay your health insurance premium in easy monthly installments.
Think of it like an EMI, just like you’d pay for your phone or fridge, but this time, it’s for your health and peace of mind. So instead of shelling out ₹12,000 upfront for an annual policy, you can simply pay ₹1,000 a month. That’s the cost of a couple of dinners out, but the value? It could save your life.
How does this work?
EMI option: Spread your premium into smaller payments across 12 months (or as offered).
No financial strain: This makes quality insurance accessible even for families with tight budgets.
Same benefits, less stress: You still get full coverage, cashless hospitalization, critical illness care, and tax benefits, without the one-time financial pinch.
It’s time we stop seeing health insurance as an expense and start seeing it for what it really is: a lifeline we can afford, if we choose smartly.
So Why Don’t More People Buy Health Insurance?
Here’s what people often say:
“I’m young and healthy, I don’t need it.”
“It’s too expensive.”
“What if I never use it?”
But health issues don’t wait for retirement. And by the time you need health insurance, it’s often too late to get it, or it costs a fortune.
Final Word: Health Insurance Is a Necessity, Not a Luxury
In today’s India, health insurance isn’t a bonus or tax-saving trick; it’s a lifeline. With chronic illnesses on the rise and hospitalization costs skyrocketing, having health insurance is as essential as having a job or a roof over your head.
Let’s stop asking: “Can I afford to buy it?”
And start asking: “Can I afford not to?”
Make 2025 the Year You Prioritize Health Insurance
Compare plans and benefits.
Get health insurance that fits your needs.
Ensure your parents and your children, too.
Buy it not for tax deductions, but because you deserve healthcare without fear.
References
WHO- Universal health coverage (UHC)
Forbes- Top Health Insurance Statistics Of 2025
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