What is the colour coding scheme for health insurance launched by IRDAI


In October, 2020, the Insurance Regulatory and Development Authority of India (IRDAI) issued draft guidelines for insurance companies, introducing a color-coding system for all individual and family floater health insurance plans. The objective was to simplify the health insurance purchase process for customers and help buyers to make an informed decision when purchasing a health insurance policy.

What is the premise of the color-coding system for Health Insurance Plans?

Health Insurance plans are quite complex and therefore, confusing in nature. There are innumerable terms and conditions that are applicable to each aspect of the policy, making it difficult for the common person to understand these finer nuances. Often, people purchase a policy based on the recommendation of an insurance advisor or a close friend without really reading through the policy documents. This lack of awareness poses a substantial problem in future, especially at the time of submitting medical claims to insurance companies for clearance. A lot of health insurance claims get settled for lesser amounts than initially claimed, or outright rejected due to exclusions or waiting periods.

Additionally, the pandemic has led to a sudden spurt in health insurance enquiries and sales, as people tried to get themselves adequately covered against hospitalization costs due to Covid-19. With so many options available in the market, including Covid-19-specific health insurance plans, consumers were left feeling overwhelmed and unsure.

These reasons prompted the regulator to release this directive of color-coding health insurance policies to insurers, to protect the interests of consumers.

What exactly is the color-coding system?

The IRDA guidelines suggest that the color code shall be indicated in the health insurance products disclosed on the websites of insurers so that the customers can make an informed choice while buying a health insurance product. This means that a color code will be attached to all health insurance policies that will give an indication to the extent of complexities in the policy features and benefits. The guidelines also state that advertisements promoting these health insurance plans will also highlight the color code attached to the particular policy.

The color-coding system has been defined as follows:

  1. GREEN: Green color coding on health insurance plans will denote that these plans are simple and easy to understand,
  2. ORANGE: Orange color coding means such plans are a bit more complex in comparison, and
  3. RED: Red color coding implies that such plans are more complicated compared to other policies

The basis of assigning green, orange or red color to a health insurance policy is on 7 critical parameters, namely:

  1. Number of Optional or Add-on Cover/s offered,
  2. Percentage of Co-payment applicable,
  3. Waiting Period,
  4. Number of Procedures and/or Diseases under Sub-limits,
  5. Deductibles,
  6. Number of Permanent Exclusions, and
  7. Simplicity of Terms and Conditions

Each one of these parameters will be assigned a score between 0 and 6. The weightage of each parameter is equal, i.e. 14.28% (100% divided by 7 parameters). Then, the overall score will be calculated for each health insurance policy based on the weighted average score of all 7 parameters (which is the individual score per parameter multiplied by 14.28% and added for all 7 parameters). The final score will determine the color-coding to be assigned to the health insurance plan as follows:

  1. GREEN: Score less than 2
  2. ORANGE: Score between 2 and 4
  3. RED: Score between 4 and 6

This is explained better with the following example:




Weighted Average


1)      Number of Optional or Add-on Cover/s offered,





2)      Percentage of Co-payment applicable,





3)      Waiting Period,





4)      Number of Procedures and/or Diseases under Sub-limits,





5)      Deductibles,





6)      Number of Permanent Exclusions, and





7)      Simplicity of Terms and Conditions










What are the advantages of the color-coding system?

This scheme is a visual indicator of the complexity of the health insurance plan. The scoring and color-coding will help consumers identify how complicated the plan could be in terms of the extent and number of parameters it carries.

However, the complete details of the policy including information on all 7 parameters would be mentioned in the terms and conditions document. This document must be thoroughly read and understood prior to purchasing the policy for complete awareness and information.

It can become a daunting task; browsing through hundreds of plans to make your final choice of a health insurance plan for your family and yourself. This is where SANA.Insure can help!

For people exploring options, we have extended this color-coding system of Green, Orange and Red to all the health insurance plans available on our health insurance portal, We have gone a step further in assigning a color to over 45 benefits, features and terms associated with each health insurance policy. This will go a long way in helping you look at individual policy features while comparing multiple plans along with the overall color-coding. You will be in a position to make a calculated and informed decision of selecting, comparing and purchasing the best health insurance plan for you and your family.

SANA.Insure has launched this special color-coding system even for existing health insurance policy holders. If you are already insured under a plan, just log in to to enter some basic information regarding your policy. The results are personalized and color-coded based on industry standards, to be able to gauge effectiveness of your health insurance policy. A detailed report can also be downloaded that lists down simple explanations of over 45 product features as well as the lowest and highest parameter range.

Wish you a healthy and happy life!

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