Health Insurance in India is not much familiar among the people, so its coverage also not that satisfactory. But some evidences show that gradually health insurance coverage is increasing. It may be because of the high health care cost, entering of the private players in insurance field, government universal health insurance policy, and intervention of community based health insurance schemes. Health Insurance is more complex than other segments of insurance business because of serious conflicts arising out of adverse selection, moral hazard, unavailability of data and information gap problems. Health sector policy formulation, assessment and implementation are an extremely complex task, especially, in changing epidemiological, institutional, technological and political scenario. Proper understanding of Indian Health situation and application of principles of insurance, keeping in view the social realities and national objectives, are important.