Insurers cash in on unlimited health insurance, leave fine print to customers

Health insurance companies have found a powerful new word to sell reassurance: “unlimited”. At a time when hospital bills are climbing sharply and a single medical emergency can drain years of savings, the promise can feel impossible to ignore. Unlimited restore. Unlimited recharge. Unlimited cover. Even after a major claim, the policy is supposed to keep protecting the customer. But once you begin reading the fine print, the meaning of unlimited starts to shift. Read Full Story That is exactly what The Unlimited Illusion series set out to examine. In the first part, India Today Digital explored how these policies often rely on restoration clauses and conditional coverage buried deep within policy wording. For the second part, I spoke to insurers and industry experts to understand how these plans actually work in practice — and why there is still no common industry-wide understanding of what unlimited health insurance truly means. Responses shared with India Today Digital show that the same word is now being used for products with very different structures, conditions and payout mechanisms. Unlimited may not mean what customers think Saurabh Vijayvergia, Founder and CEO of CoverSure, a digital insurance platform, described unlimited health insurance as “essentially a marketing term” used for plans that do not impose a fixed upper cap on certain treatments or hospitalisation expenses. “In practice, however, it does not mean every medical expense is automatically covered without conditions,” Vijayvergia told India Today Digital. “The unlimited aspect usually applies only to specific coverage components or restoration structures, not to unrestricted claim payouts under every circumstance,” he said. According to him, the gap between customer expectations and actual policy structure becomes most visible during claims. “We see this play out regularly. A customer buys an unlimited health insurance plan, feels fully protected, gets hospitalised, and then discovers that a meaningful portion of the bill is still out of pocket,” he said. “Not because the insurer acted unfairly, but because unlimited was never what the customer assumed it to be,” Vijayvergia added. He said most customers interpret unlimited far more broadly than insurers operationally define it. “In most cases, unlimited refers only to the sum insured, not to every rupee of every hospital expense being covered,” he said. That distinction becomes important because hospital bills are rarely made up of just one expense. Room-rent limits, co-payment clauses, disease-wise caps and network hospital conditions can all influence how much money a customer finally receives during a claim. According to Vijayvergia, room-rent sub-limits, co-payment clauses and hospital network conditions continue to significantly influence final claim payouts even in many high-cover or unlimited plans. The issue is becoming more important as India’s health insurance market rapidly expands. Citing the Insurance Regulatory and Development Authority of India’s (IRDAI) Annual Report 2024–25, Vijayvergia said insurers processed 3.26 crore health insurance claims during the year, while nearly 8% were repudiated. He said policy exclusions, waiting periods and documentation gaps were among the major reasons. At the same time, health insurance premiums grew 27.17% year-on-year in January 2026, while rising private hospital costs are pushing more families toward larger health covers. “Understanding what those policies actually pay for has become just as important as buying them,” Vijayvergia said. That confusion becomes even more complicated because insurers themselves are defining unlimited in very different ways. One word, different meanings Responses from insurers show there is no single industry-wide understanding of what unlimited actually means. Anshul Mittal, Joint President & Appointed Actuary at HDFC ERGO General Insurance Company Limited, said the company’s “Unlimited” feature is designed to ensure continuity of coverage once the base sum insured is exhausted during a policy year. “In practical terms, it automatically restores the sum insured, whether it is partially or fully utilised, enabling customers to remain covered for subsequent hospitalisations,” Mittal told India Today Digital. According to Mittal, the restoration benefit can apply to both related and unrelated illnesses and may be used multiple times within the same policy year, including for the same illness, subject to policy conditions. But even HDFC ERGO clarified that unlimited payouts are a common misconception. “It is also important to note that each restoration is typically capped at the base sum insured,” Mittal said. What this means is that if a customer has a base cover of Rs 10 lakh, every restored amount would usually also be limited to Rs 10 lakh, even if the policy allows the benefit to be triggered multiple times during the year. He added that customers often incorrectly assume that restore benefits can