Here’s why your health insurance premium rises each year and what you can do to manage it

Here’s why your health insurance premium rises each year and what you can do to manage it  8th February 2023

Most investments are made to reap future benefits or protect yourself from contingent liabilities that may arise. Buying health insurance is one investment you must make to protect yourself financially in the present times. Even though several online health insurance companies deliver their services to your doorstep, buying health insurance has never been simpler. Surprisingly, about 30% of Indian households still do not have any health insurance coverage.

Experts believe that mass misinformation, complex policy wording, and the rising cost of premiums are to blame for the low figures. This requires the intervention of online health insurance companies to clarify and spread awareness among the public.

However, if the increasing cost of health insurance makes you think before purchasing or renewing your policy, read on to learn about the factors influencing the premium rates and whether you can manage them.

1. Inflation:
Unless you have been living under a rock, there is no way you could have missed out on the discussions regarding the skyrocketing rates of medical inflation globally.
The increased prices of healthcare services and consumables and an imbalance in demand and supply of equipment and professionals are also responsible for the rising costs of hospitalisation. This has directly increased premiums to minimise the risk online health insurance companies bear. But this trend is unlikely to settle, making premiums inevitably pricier each year.

2. Claim history:
Suppose you have raised frequent claims over the years. In that case, you are classified as a high-risk policyholder since renewing your policy will likely result in more significant payouts for the insurer. However, this does not apply to all online health insurance companies. Ensure you check the fine print of alternative policies and choose one that does not include a clause of increasing your premium with each claim you raise.

3. Age:
With age, one’s immunity weakens, making one susceptible to illnesses. Older people are at greater risk of diseases and hospitalisation, making them high-risk clients for health insurance companies, which is why they are charged higher premiums. Paying a higher premium means better coverage and a greater insured sum. Do not compromise on protecting your future by skimping on the premium, and ensure your policy provides comprehensive coverage against various illnesses and a sizable insured sum.

4. Policyholder’s medical history:
Online health insurance companies ask for a complete medical record of potential policyholders to assess the risk of insuring them. A health check-up before approving your policy informs them of general well-being and any pre-existing conditions that may lead to frequent hospitalisation, making you a high-risk client.

5. Add-on covers:
Depending on your age and medical history, you may purchase add-on covers that protect you against specific conditions or events. While they make your policy more comprehensive, they inevitably make it pricier.
However, it is best not to compromise your health needs and skimp on your health insurance coverage. Ensure you check your policy wording to purchase an add-on only when necessary.

Insurance buyers are advised to be alert and responsible while investing in health insurance. The rising premium is a concern, but a little alertness and awareness today can help in the long run. Here are a few key takeaways for managing rising health insurance premiums in India:

• Choose a comprehensive health insurance plan.

• Compare policies and opt for the best online insurance companies with the required features.

• Maintain a healthy lifestyle and use cashless facilities.

• Review coverage annually and look for discounts and special offers.

• Seek advice from a financial advisor.

Health insurance is an essential investment for your physical and financial well-being. While renewals may get pricier annually, a prudent policyholder can always get the most significant value from his premium payment by doing due diligence. Ensure that you initiate the policy renewal process before it is slated to lapse. Review the offerings of multiple online health insurance companies before choosing to renew or porting it.

Click HERE to buy the best health insurance plan with an attractive premium.

Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.