What is the Average Cost of Health Insurance?

Health insurance is not a choice anymore, but a necessity. However, one common question individuals usually ask before picking any health insurance policy is, What is the average cost of health insurance? The average annual premium for an individual health insurance plan is between Rs. 3,000 and Rs. 8,000. Nevertheless, several factors will affect its cost, such as sum insured, age of family members and more.

Let’s understand the average cost of a health insurance policy, which may also help you make a smart decision.

Estimated Annual Health Insurance Premiums

This guide may help you understand the average cost of a health insurance policy:

Note: The number mentioned above may vary.

Factors That Affect Health Insurance Costs

Many factors affect the premium, such as:

• Age of the insured: Younger people need to pay lower premiums as compared to older adults; thus, the cost of the premium can increase with age.


• Sum Insured: The amount of coverage also affects the premium cost. For example, if you select a plan of Rs. 10 lakh, it will come with a higher premium.


• Past Medical History: If anyone is suffering from any chronic disease such as heart disease, cancer, or diabetes, then this may increase the overall cost.


• Your location: Healthcare costs are different in each city. Tier 1 cities have a higher premium compared to Tier 2 and Tier 3 cities.


• Type of Plan:Family health insurance plans are cheaper than buying a separate policy for every member.

Is Paying More Always Better?

Paying a higher premium does not always guarantee better coverage. Comparing the benefits of a policy, such as network hospitals, room rent limits, sub-limits, waiting periods, and claim settlement ratios, is equally important.

Rather than going for the priciest plan, it is more crucial to select an insurance policy that meets your medical requirements and budget.

Tips to minimise the price burden of a health insurance

Tips to reduce health insurance plan costs:

• Compare different health insurance plans.


• Select the right coverage level.


• Discover different family plans.


• Review and update your policy regularly.

To Sum Up

The average cost of a health insurance plan differs based on age, location, sum insured, and plan type. In addition, the cost of premiums may also vary depending on whether you pick a family floater plan or an individual plan.