What Drives Health Insurance Adoption Among Urban Indian Households? The Role of Cost, Trust, Financial Literacy and Claim Experience

India has expanded health insurance and publicly financed health-protection coverage rapidly, but policy ownership does not necessarily imply adequate, understandable, or continuously usable protection. This paper examines the determinants of health insurance adoption among urban Indian households, concentrating on cost, trust, financial literacy, and claim experience. It uses a structured narrative review and descriptive secondary-data analysis; no original survey results are invented or reported. Evidence is drawn from National Family Health Survey data, National Health Accounts, government and regulatory releases, and peer-reviewed research on enrolment, purchase intention, and renewal. Household coverage under a health insurance or financing scheme increased from 28.7% in NFHS-4 to 41.0% in NFHS-5 and 60.2% in NFHS-6. Nevertheless, NFHS-6 records lower coverage among urban than rural households, demonstrating that proximity to insurers and hospitals does not by itself ensure adoption. The review finds that affordability establishes whether purchase and renewal are feasible, while perceived value determines whether households are willing to exchange current income for a contingent future benefit. Financial and insurance literacy affect the ability to compare waiting periods, co-payments, sub-limits, exclusions, network access, and portability. Trust determines whether households believe insurers, intermediaries, hospitals, and public institutions will honour their promises.