Typically, zones are classified under 1, 2 and 3. While each insurer has its own way of classifying cities, Delhi and Mumbai usually fall under zone 1, most of tier-I cities are categorised as zone 2 and the rest of India falls under zone 3
If you think your age, gender, health condition and sum insured are the only factors that determine the cost of your health insurance policy, think again. The city that you reside in also plays an important role in deciding your health insurance cover. In fact, many insurers today offer city-specific health insurance plans that allow you to pay premium as per your area of residence.
Typically, zones are classified under 1, 2 and 3, respectively. While each insurer has its own way of classifying cities in different zones, Delhi and Mumbai fall under zone 1, most of tier-I cities are categorised as zone 2 cities and the rest of India falls under zone 3.
How it impacts you
The premium amount varies by 10% on an average for each category. For example, if you fall under zone 3, your health insurance premium will be 10% cheaper than what you would have to pay if you were in zone 2. Similarly, someone who belongs to zone 1 will have to pay 10% higher premium vis-à-vis zone 2. However, this difference in premium amount can be as low as 2-3% in case of certain insurance plan, depending on the age of the insured.
Some insurers restrict the coverage if a policyholder from a lower zone moves to a zone 1 city for advanced treatment. This quantum of restriction varies from policy to policy. Under such scenario, you can avail treatment in zone 1 city through co-payment clause wherein you will be liable for contributing a fixed percentage towards your medical expense, consultation fee and hospitalisation charges. Your contribution can be anywhere in the range of 10- 20%, depending on your health insurance plan.
A city-specific health insurance may not be advisable in all scenarios, but there are some cases when it makes sense to have it. If you are financially restricted, a city-based or zone-based coverage will be a better option for you.
All-India coverage may cost you more and, hence, would not fit into your overall scheme of things.
You can manage without pan-India health insurance coverage if your city has well-equipped hospitals to treat majority of ailments and diseases. Moreover, you may opt for city-specific health insurance plan if you are a student and are likely to stay in the city for a longer duration.
When not to Opt for It
If you are willing to pay extra, opt for pan-India coverage. In any case, there are two specific cases when you should avoid zone-based coverage:
Advanced treatment: City-specific health insurance doesn’t help if you require advanced treatment in tier-I cities. Some insurers restrict the coverage if a policyholder from a zone 3 city moves to zone 1 city for advanced treatment. Also, some insert co-payment clause for undergoing treatment in bigger cities.
Senior citizens: In the higher age bands, it’s better to pay extra premium and get pan-India coverage rather than confining yourself to a single zone owing to higher medical costs.
It is advisable to opt for All-India health coverage. This may come handy if you were to shift location or avail treatment in other city or zone, especially if you fall under the higher age bracket, unless, of course your city offers advanced medical treatment.