Ms.Princey Mehra, Chief Compliance Officer, Star Health & Allied Insc Co. Ltd. 

Health insurance has become an essential part of financial planning for Indian households. As medical costs continue to rise and out-of-pocket spending remains significant, understanding how a policy actually works is more important than ever. Yet many purchase decisions are still shaped by assumptions that seem minor at first, but can create confusion, disappointment, and unexpected financial strain when a claim arises.
One of the most common misconceptions is that all illnesses are covered from the first day of the policy. In reality, most policies include waiting periods for specific treatments and pre-existing conditions. This often leads to a second misunderstanding: that once a pre-existing illness is disclosed, it will be covered immediately. Disclosure is absolutely essential, but waiting periods still apply. In the same way, many people wrongly assume that those with diabetes, hypertension, a history of cancer, or certain lifestyle habits cannot get health insurance at all. In most cases, they can, provided there is full and honest disclosure at the time of application.
Other misconceptions arise from not fully understanding policy structure. Room rent limits, for instance, are often underestimated, even though choosing a room above eligibility can increase overall out-of-pocket costs. Many policyholders also assume that the sum insured they chose a few years ago will still be enough today, despite rising healthcare inflation and the growing cost of advanced treatment. Similarly, the cheapest premium is often seen as the smartest choice, when lower premiums may come with co-payments, sub-limits, deductibles, or narrower hospital networks. Employer-provided health insurance is another area where assumptions can be misleading. While group cover is valuable, it is tied to employment and may not offer continuity over the long term.
Misunderstandings also extend to the claims process and the role of the customer. Some expect payment to be immediate once a claim is approved, but bill verification and document review remain a necessary part of the process. Younger individuals often believe they do not need health insurance yet, even though buying early usually means lower premiums and the advantage of completing waiting periods before health risks rise.
Finally, many rely entirely on advisors without reading the policy document themselves. Guidance is important, but informed decision-making remains the strongest safeguard. Breaking these misconceptions can lead to better choices, smoother claims, and greater financial confidence when care is needed most.