Live in Delhi or Mumbai? You could be paying double for the same health cover

Live in Delhi or Mumbai? You could be paying double for the same health cover

In India, insurers divide locations into risk-based zones, and your zone directly affects the price you pay for a health policy—even if the coverage remains the same.

Urban areas see more claims due to higher population density and lifestyle diseases
Business Today Desk
  • Mar 22, 2025,
  • Updated Mar 22, 2025, 7:59 AM IST

Your insurance premium isn't just about your age, medical history, or the sum insured — it also depends on something you might not have considered: your pin code. "Where you live plays a huge role,” writes insurance expert Nikhil Jha on X. 

In India, insurers divide locations into risk-based zones, and your zone directly affects the price you pay for a health policy—even if the coverage remains the same.

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According to Jha, “A person in Delhi may pay way more than someone in a small town—even for the SAME policy.”

How zone-based premiums work

Insurers classify cities into three zones depending on healthcare costs, claim frequency, and medical inflation:

  • Zone A (Highest premium): Metro cities like Delhi, Mumbai, Kolkata, Chennai
  • Zone B: Tier-1 and Tier-2 cities
  • Zone C (Lowest premium): Tier-3 cities and rural regions

Why the difference matters  

  • Healthcare in metros is more expensive, so claim amounts are typically higher
  • Urban areas see more claims due to higher population density and lifestyle diseases
  • Greater risk exposure in cities leads to costlier underwriting for insurers

How your zone affects your policy

  • If you live in a Zone A city, your premium will be higher
  • Moving from a metro to a smaller town could reduce your premium
  • What if you relocate?

Some insurers adjust your premium when you change cities, while others might apply a co-pay instead

  • Moving from Zone C to Zone A may mean a higher premium
  • A zone-wise co-pay could kick in if portability isn’t offered

“If you travel often between zones, check if your insurer has pan-India coverage or zone-wise co-pay. It can impact your out-of-pocket expenses,” says Jha.

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