For years, a Rs 5 lakh health insurance policy has been the go-to choice for many Indian families. But with healthcare costs rising rapidly, that level of cover may no longer be enough, especially for older adults and those living with chronic illnesses.
A new analysis of more than one lakh policyholders by platform CoverSure has found that a majority of people above the age of 50 have coverage of less than Rs 5 lakh. Even more worrying, 17% of policyholders with chronic medical conditions also have a sum insured below Rs 5 lakh.
The findings raise an important question for millions of policyholders: Is your health insurance keeping pace with your healthcare needs?
Medical costs have risen sharply over the past few years.
A single hospitalisation for a serious illness, surgery or prolonged ICU stay at a private hospital in a metro city can easily run into several lakhs. In many cases, a Rs 5 lakh cover may not be sufficient to meet the entire bill.
The CoverSure analysis found that many people who are statistically more likely to require hospitalisation continue to have relatively low insurance coverage. It noted that a single admission in a Tier-1 city could potentially exhaust a Rs 5 lakh health insurance policy.
The study found that the coverage gap is most visible among older policyholders.
A majority of those aged above 50 continue to have health insurance cover below Rs 5 lakh despite facing higher health risks. At the same time, around 35% of users assessed reported having at least one medical condition.
Among policyholders with lifestyle-related diseases such as diabetes, hypertension, high cholesterol and thyroid disorders, nearly 69% fall in the 30-54 age group—the period when financial responsibilities are often at their highest.
One of the biggest takeaways from the analysis is that many people buy health insurance once and rarely revisit it.
Nearly half (49%) of policyholders who have no pre-existing medical conditions—and are therefore eligible to upgrade to a better plan—continue to remain in basic, non-comprehensive policies.
According to the report, the issue is not access but awareness, as many policyholders do not review their insurance even as their income, family size and healthcare needs change.
The study also found that delaying an upgrade can leave policyholders with fewer options later.
Around 63% of people who wanted to move to a better health insurance plan were unable to do so because they had already developed pre-existing medical conditions, making portability and migration more difficult.
This means that while upgrading your cover may be relatively easy when you are healthy, doing so after being diagnosed with conditions such as diabetes or hypertension can become more challenging.
Commenting on the findings, Saurabh Vijayvergia, Founder and CEO of CoverSure, said buying health insurance should not be seen as a one-time exercise.
“Buying insurance is a starting point, not a destination. A policy that was right at 32 may leave someone dangerously underprotected at 35. Healthcare costs are rising, and lifestyle conditions are arriving earlier than most people expect,” he said.
The findings highlight an often-overlooked aspect of health insurance: buying a policy is only the first step. As medical costs rise and health risks change with age, reviewing your sum insured every few years may be just as important as buying the policy itself.