How does Health Insurance Work for People in Tier 2 Cities?

Individuals living in smaller cities often face unique challenges related to healthcare. Due to a lack of adequate facilities in public hospitals, Tier 2 city hospitals usually have fewer beds than major urban centres. Thus, during severe illnesses, families need to move to larger cities to seek better medical facilities.

Families with a medium income often face financial burden in spending for unexpected hospitalisation costs that may range from ₹50,000 to ₹2 lakh. Thus, a health insurance policy is necessary for individuals and families in Tier 2 cities to cope with the rising medical expenses.

Here’s more about how health insurance works in tier 2 cities!

What are the Facilities Offered by a Health Insurance in Tier 2 Cities?

Health insurance policies offer the following benefits in Tier 2 cities, offering financial security against rising healthcare expenses:

• Financial Protection

Health insurance policies in Tier 2 cities offer extensive financial coverage for inpatient hospitalisation, pre- and post-hospitalisation, etc. You can avail coverage for 30-60 days before hospitalisation and 60-120 days after hospitalisation, including medicines, follow-up checkups, diagnostic tests, etc.

• Access to Network Hospitals

Insurance companies are expanding their network of hospitals in Tier 2 cities to provide cashless treatment without travelling far from their homes. There are over 14,000 network hospitals empanelled under top insurance providers, enhancing your convenience and access to better health care.

• Lower Premiums Compared to Tier 1 Cities

Individuals living in Tier 2 cities pay lower health insurance premiums than those living in Tier 1 cities. The health insurance premium rates in Tier 1 cities are usually 10-15% higher than those in Tier 2 cities.

For instance, a health insurance policy of 10 lakh coverage may have a premium of ₹15,000 in Jaipur, but ₹17,500 in Mumbai (approximate costs).

• Offers Tax Benefits

Premiums paid for health insurance are eligible for up to ₹25,000 tax deductions per year under Section 126. For senior citizens, the deduction amount is up to ₹50,000 per annum. Moreover, you can receive ₹5,000 deductions for preventive health checkups.

How to Choose a Health Plan in Tier-2 Cities?

It is essential to understand the limitations and specific needs of healthcare in a Tier 2 city before opting for a health insurance plan. Here are the top things to consider while choosing a health insurance plan in Tier 2 cities:

• Rapid urbanisation increases living expenses in Tier 2 cities, leading to a rise in healthcare expenses. Thus, while choosing a health plan, determine the sum insured based on your needs and budget.


• Look for network hospitals near your location to avail cashless treatment facilities at top facilities. Tier 2 cities usually have multiple network hospitals to provide better healthcare access. Always check the list of hospitals empanelled under your insurance provider to ensure that it is close to your home.


• Consider your occupational hazards, such as chances of any specific injury while working, exposure to harsh chemicals, etc., while purchasing a health plan. This is because a risky occupation can increase your health insurance premium.

Whether you live in a Tier 2 city or a Tier 1 city, everyone can access health insurance plans online. Conduct your research to compare different plans and then select the right one that suits your needs and fits your budget.