A dominant discourse in the social sciences theorizes that religious diversity puts individuals’ health at risk via interreligious hostility. However, this discourse overlooks the different subtypes of religious diversity and the moderation of political institutions. To better understand the issue of diversity and health, in this study, we distinguish between two subtypes of religious diversity—polarization and fractionalization—and argue that their impacts on health are heterogeneous. Using a sample of 67,399 individuals from 51 societies drawn from the 2010–2014 wave of the World Values Survey, our multilevel analyses show that religious polarization is negatively associated with individual health, whereas the health effects of religious fractionalization are positive. Moreover, the associations between religious polarization/fractionalization and individual health are found to depend on the democratic level of the state. In more democratic countries, the negative effects of polarization on health are mitigated, and the positive effects of fractionalization are stronger.