Health insurance for parents in India: what should an NRI look for?

This guide is for you if you live abroad and are choosing health cover for parents who live in India, or moving their existing cover to another insurer. NRI, short for non-resident Indian, is the everyday word for an Indian who lives abroad. The short answer links each term to the section that explains it, and each term below is explained the first time it comes up.

Kiran and Kiran’s parents are made up for this guide, and every amount is illustrative. Kiran works in Dubai. Kiran’s parents are in their mid-sixties and live in a smaller city in India, and one of them has diabetes. Last year that parent spent a week in hospital, and the bill came out of Kiran’s savings. Kiran wants a policy that pays when the next bill comes.

Who is who on the policy

A health policy names two roles: the insured is the person whose risks are covered, and the policyholder is the person in whose name the policy is issued.

In this guide each parent is both the insured and the policyholder. You are the one who pays, from abroad.

Where the terms are written

IRDAI, the Insurance Regulatory and Development Authority of India, is the insurance regulator. The premium is what is paid to keep the cover in force.

Every health policy comes with a Customer Information Sheet, or CIS, in a format IRDAI prescribes. It is short, and it sets out in simple words:

• the sum insured (what it does and does not mean);
• what is covered, and the exclusions;
• the sub-limits, deductibles and co-payment (shown on one bill);
• the waiting periods (three kinds).

The policy document, also called the policy wording, has the complete details, and it prevails if the two conflict.

For a policy of a year or more, the policyholder has 30 days from receiving the policy document to read it and cancel it. The premium is then refunded, less a proportionate risk premium for the period covered (the part of the premium for the days already covered), and any medical examination and stamp duty costs. The CIS comes with the policy, so the 30 days after the policy document arrives are when you can read these terms and still cancel.

The sum insured is a limit, not the payout

The sum insured is the limit of the cover. A bill well under that limit may still be paid only in part. Three terms do this, each in its own way.

• Sub-limit. A pre-defined limit above which the insurer will not pay. In the example below it caps one item on the bill.
• Deductible. A set amount up to which the insurer pays no claim; when the claim is larger, that amount is taken off the total.
• Co-payment. A set amount or percentage of the claim amount the policy accepts, which the policyholder or insured pays.

Here is Kiran’s parent’s next hospital bill, on a policy whose sum insured is far above it. Each row applies one term on its own. In every row the whole bill counts as cost the policy accepts.

In the sub-limit row, the ₹75,000 item is paid only up to ₹50,000, so ₹25,000 is not paid.

The bill never came near the sum insured, and still it was not paid in full. A policy may carry more than one of these terms, and it states each of them. Its wording decides how they combine.

With two parents, the sum insured is either individual, where each parent has their own, or floater, where both share one limit that either or both may use.

We read a co-payment for a parent over 60 as something each insurer chooses for each product, not a rule the regulator sets by age. The rules we read ask a policy to state its co-pay limits, if any, and set no co-payment for any age. So whether your parent shares each bill, and by how much, is a line to check in the CIS.Our reading

Room-rent limits: when a room shrinks the rest of the bill

A proportionate deduction scales down a group of charges on a bill, instead of capping one item. Under IRDAI’s June 2020 norms, a policy made one when the policyholder chose a higher room category than the policy allowed: it scaled down the “associated medical expenses”. The room category a policy covers is what this guide calls its room-rent limit.

Associated medical expenses were the charges the policy itself defined. Under those norms they could not include pharmacy and consumables, implants and medical devices, or diagnostics, and the deduction could not apply to ICU charges. So under those norms one choice, the room, made other parts of the bill smaller.

IRDAI’s health master circular of 29 May 2024 superseded the 2020 norms. Today a policy must clearly state any proportionate deductions, along with its sub-limits, any co-pay limits, its waiting periods and its deductibles.

We found no replacement for those limits, so we read the current rules as leaving it to each policy’s wording. The only way to know which charges a room-rent limit scales down is to read that clause in the policy wording itself. The other reading is that those older limits still hold in practice, because policies were rewritten to them.Our reading

So in your parents’ policy, find the room category it covers and its proportionate-deduction clause, and read which charges that clause scales down.

Three kinds of waiting period

A waiting period is time at the start of the cover during which some things are not paid for. There are three kinds. Some are counted in months of continuous cover, which means cover renewed without a break.

A pre-existing disease is any condition, ailment, injury or disease that a physician diagnosed, or recommended or gave treatment for, in the 36 months before the policy starts. Kiran’s parent’s diabetes, diagnosed years ago and treated since, is one.

The 36-month cap on the pre-existing disease waiting period is for a disease that has been disclosed.

Each policy must clearly state its own specific waiting periods. The CIS sets out each one as a number of months, for the diseases or procedures it covers. To see whether diabetes, or a treatment linked to it, is also on a policy’s specific list, read that line in its CIS and wording.

Why declaring every condition matters

The CIS asks you to disclose every pre-existing disease or condition before buying, and warns that not disclosing may affect how a claim is settled. Non-disclosure means leaving a condition out. Misrepresentation means stating it wrongly.

A policy is renewable except on grounds of established fraud, non-disclosure or misrepresentation, provided the product is not withdrawn.

After 60 continuous months of cover, the insurer cannot contest the policy or a claim for non-disclosure or misrepresentation, only for established fraud. This is called the moratorium. Cover moved from another insurer counts towards those months.

Two clocks that start with the cover

Two clocks start on the first day of cover, and they measure different things.

• The waiting clock decides when a condition is covered. For a disclosed pre-existing disease, it runs for at most 36 months of continuous cover.
• The moratorium clock decides when the insurer can no longer contest the policy or a claim for a condition left out or stated wrongly, except for established fraud. It runs for 60 continuous months.

Both clocks count only cover that has not been broken.

Renewing. Credits are the time already served on each clock. If the premium is paid yearly, half-yearly or quarterly, there is a grace period of 30 days after the due date. A policy renewed within it keeps all its credits, the waiting periods and the moratorium included. When a specific waiting period ends, those diseases or treatments are covered only if the policy has been renewed without any break. Renewal cannot be refused because your parent made claims in earlier years.

Moving to another insurer. This is called porting. The policyholder applies to the new insurer at least 30 and at most 60 days before the renewal date, for the whole policy with every family member on it. The credits already earned move with it, up to the sum insured. They include the waiting time served, for specific and pre-existing conditions, and the moratorium. No charge may be made for porting a policy in or out.

Raising the sum insured. The moratorium applies to the sum insured of the first policy. When the sum insured is raised, the 60 months for the extra part run from the date of the increase.

When a parent is in hospital

Here is what happens when Kiran’s parent is admitted again.

1. Kiran’s parent is admitted to hospital.
2. The policyholder or claimant tells the insurer about the claim as early as possible: in person, online, through the distribution channel (the agent, broker or other route the policy was bought through), through the insurer’s third-party administrator (the firm that handles claims for the insurer), through the hospital, where the hospital offers this, or through the insurer’s call centre.
3. Each insurer lists on its website the hospitals where it offers cashless claim settlement. At any other hospital, the claim has to be filed with the insurer for reimbursement. Reimbursement means the bill is paid first and the money is claimed back.
4. The insurer and its third-party administrator collect the documents they need from the hospital; the policyholder does not have to submit them.

No claim may be rejected or closed because documents are missing, or because the claim was reported late.

Age and getting a policy

Insurers must offer health products for all age groups, and may design products specifically for senior citizens. That does not mean an insurer must have one product that caters to everyone.

So we read a particular policy as free to set its own entry ages. A parent of any age should find some product open to them, though perhaps not the first one looked at.Our reading

Paying the premium from abroad

Two rupee accounts come up here. An NRE account is a rupee account for money you earn abroad. An NRO account is a rupee account for everyday rupee dealings, including income arising in India. Our NRE, NRO or FCNR guide explains both.

An NRE account may be debited for local disbursements, among other things. An NRO account may be debited for local payments, among other things. These are the RBI’s (Reserve Bank of India’s) words for spending inside India from the account.

This reading assumes your parent is both the policyholder and the insured, so the policy is issued to a resident, not to you. We read a premium paid to an Indian insurer on such a policy as a local payment in India, which both accounts allow. The RBI’s rule on which account pays a premium is in its directions on life insurance issued to non-residents. Its part on general insurance, health included, names no account. On this reading, the premium may come from either account. The other reading is that a rupee premium should come only from the NRO account, applying the life insurance rule by analogy, most directly where you, not your parent, hold the policy. So before you pay, check that the policy names your parent as the policyholder, because this reading rests on that.Our reading

The Indian tax deduction, and when it helps

Under section 126 of the Income-tax Act, 2025, an individual with income taxable in India can deduct what they pay to keep a parent’s health insurance in force. Where the parent is not a senior citizen, the limit is ₹25,000 in a tax year, for the premium and any preventive health check-up for them together. A tax year is India’s twelve-month income year, starting in April.

Where the insured parent is a senior citizen, the limit is ₹50,000 instead. For tax, a senior citizen is someone resident in India who is 60 or more at any time in the tax year. So parents in their mid-sixties who are resident in India are senior citizens for this. The premium has to be paid by any mode other than cash.

Two separate reasons may stop the deduction from helping you:

1. No Indian income, nothing to deduct from. The deductions together can never be more than your gross total income. That is your total income worked out under the Act before these deductions are made. With no income in India, there is nothing to deduct from.
2. The new tax regime leaves it out. Under the new tax regime of section 202, income is worked out without this deduction. That regime is the default way an individual’s tax is worked out, unless they opt out of it.

Kiran’s only income in India is a little interest on rupee savings. So the first reason caps the deduction at that interest, and under the default regime the second removes it altogether. If you have more Indian income, such as rent, the second reason is the one that matters. Our NRI tax return guide covers filing a return, the yearly filing with the tax department, and the new regime.

If a claim goes wrong

1. Complain to the insurer, or register the complaint on Bima Bharosa, IRDAI’s complaints portal. The insurer must acknowledge it at once and resolve it within 14 days, giving reasons with reference to the policy terms if it does not accept it.
2. For a parent who is a senior citizen, every insurer must have a separate channel for senior citizens’ claims and grievances, with its details on the insurer’s website.
3. If the insurer’s answer does not settle it, the complaint can go to the Insurance Ombudsman for the area, with no fee, where the claim is up to ₹50 lakh.

What to read first, and what to do

For parents in their sixties with a known condition, we read the terms that decide how much of a bill is paid as more important than the headline sum insured. Those terms are the waiting periods for their conditions, any co-payment, any room-rent limit and its proportionate deduction, the sub-limits, and whether hospitals near their home are on the cashless list. Read them in the CIS and then in the policy wording. Compare sum insured and premium only between policies whose terms already fit.Our reading

Common mistakes, each the flip side of a section above:

• Comparing only the sum insured, when a sub-limit, a deductible or a co-payment decides what a bill pays.
• Choosing a room above the policy’s category without reading its proportionate-deduction clause.
• Leaving a condition out of the proposal.
• Letting the policy run past the grace period.
• Applying to move to another insurer too close to the renewal date.

What to do:

• Read the CIS, then the policy wording, which prevails if the two conflict.
• Use the 30 days after the policy document arrives to read it, and cancel if it does not fit.
• Declare every condition each parent has.
• Renew on time, or at the latest within the 30-day grace period.
• To move to another insurer, apply 30 to 60 days before the renewal date.
• Check the insurer’s cashless list for hospitals near your parents’ home.

If your situation differs from Kiran’s:

• A parent under 60. The lower tax limit applies, and the co-payment is still a line to check in the CIS.
• A known condition. The pre-existing disease waiting period applies, so declare the condition.
• An older policy already in place. Moving it at renewal carries the credits across, and raising the sum insured starts a new moratorium on the extra part only.
• A smaller town. Check which hospitals near home are on the cashless list.

Wherever you live, the Indian side of this guide is the same. Whether your own country’s tax rules touch a premium you pay for your parents is outside this guide.

In short

The sum insured is only the limit. What a bill actually pays depends on a few terms. The CIS sets out the sub-limits, deductibles, co-payment and waiting periods. The policy wording states any proportionate deduction. The insurer’s website lists the cashless hospitals. Declare every condition and keep the cover unbroken, because two clocks are running: one decides when a condition is covered, the other when the insurer can no longer contest the policy or a claim for a condition left out or stated wrongly, except for established fraud. We read either your NRE or your NRO account as able to pay the premium when your parent is both the policyholder and the insured; the other reading is NRO only.Our reading The tax deduction helps only if you have Indian income and have opted out of the new regime.

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