Is there a change in Health Insurance Premium on Renewal?

Have you noticed that your health insurance premium increases on renewal and you’re not sure why this happens? Read on to find out why health insurance premiums increase every year, how you can reduce this increase and what are some renewal benefits you can avail with Digit’s health insurance.

Right from your pay, your house rent to the price of fuel and food. Time and inflation affect expenses of your life, including that of your health insurance premium.

And like most things in life, one of the primary reasons for this increase is due to inflation. This may surprise you (or not) but the inflation in the healthcare industry is a lot higher than most other industries.

However, apart from healthcare inflation there are also other reasons why your health insurance premium may increase on renewal such as your age, your coverage benefits, claims you’ve made during the year, and of course your overall health and wellbeing as well.

Let’s deep dive into each of these causes and see why your health insurance premium increases on renewal, and what you can do about it.

#1 Healthcare inflation

According to the Economic Times, inflation in healthcare is growing at a rate of 12 to 18%! This includes overall costs such as cost of medicines, hospital admission charges, cost of various treatments, medical advancements and so on.

Due to the rise in these expenses, your insurer too needs to increase your sum insured every year i.e. coverage to be able to cover for these costs when you make a claim.

This is primarily why there is consequently an increase in your health insurance premium too when you renew for the new policy year.

What you can do about it?

The bad news is that, given that this is directly related to medical expenses, and the required increase in your sum insured, there isn’t too much you can do about this.

However, the good news is that some insurers do offer renewal discounts and bonuses depending on your claim history.

So, check with your insurer (or just check your policy document) to see if you have any of these benefits in your plan. In case you have a health insurance with Digit – you can check your policy summary for the same.

However, yes, we do offer a cumulative bonus benefit for those who’ve not made any claims in the previous year. This means, we increase your sum insured without any increase in your health insurance premium! 😊

Think of it as a little reward for taking such good care of your health!

Additionally, we also offer an add-on cover where you can customize your plan to be inflation-proof by automatically increasing your sum insured by Rs 25,000 or Rs 50,000 every year!

This is irrespective of whether you’ve made claims or not, and the increase in premium for this benefit will only be applicable at the time of renewal.

#2 Your claim history

Some insurers do increase your health insurance premium depending on the number and amount of claims you’ve made during the year. However, this may not be the case with all health insurers.

To check whether your health insurance increases your premium based on your claim history, open your policy document and check your claims section, or the section where your terms and conditions are displayed.

If you have Digit’s health insurance policy, then you don’t need to worry as we don’t increase your health insurance premium based on the number or amount of claims you’ve made. 

What you can do about it?

If your insurer does increase your premium based on your claim history, then there isn’t much you can do about it with your existing insurer as it is part of their terms and conditions.

However, you can consider porting to a different health insurer that doesn’t come with this condition. Porting is something you can only do during renewal, so evaluate other options and make your decision accordingly.

#3 Your age

You may already know this, that your health insurance premium is generally dependent on various factors, including your age.

In some cases, increase in age too can affect your health insurance premium on renewal. This is especially true for those touching 60 during or just before renewal.

What you can do about it?

You can’t turn back time and turn younger, but what you can do is be mindful about the sum insured you go for. If you’re relatively young, you probably don’t need a lot of coverage but say if you have a plan for your senior parents, they may need higher coverage.

So, always customize your and your family’s sum insured based on their age and healthcare needs as well. 

#4 Change in coverage benefits

During your health insurance renewal, you can choose to make changes in your coverage and benefits, depending on your insurer’s terms and conditions.

You may choose to do this due to the fact you realize you need more coverage or due to change in personal circumstances too (maybe you plan to opt for a maternity add-on or have recently been diagnosed with a health condition that will need more coverage)

So, in case you do make changes such as opt for an add on or decide to increase your sum insured; then your health insurance premium too will increase based on the same.

What can you do about it?

The best thing to do in this case is to review your health insurance plan in detail, this way you can see what your coverage and benefits are, and if they make sense for your increasing health needs or not. You can explore and upgrade to other plan options too with your current insurer.

Another thing you could do is, compare other health insurance plans online – just to see if there’s any other plan out there that is better suited for your current situation.

#5 Your health and wellbeing

Now, you already know that the general case is that your health insurance premium will at least increase a bit due to inflation. However, most health insurers also consider how healthy you’ve been in the previous year and reward you accordingly.

For example: At Digit, if you haven’t made any claims during the year – we give you a cumulative bonus benefit i.e. we increase your coverage without any increase in your premium during renewal!

Similarly, some health insurers could also increase your health insurance premium on renewal if you’ve recently been diagnosed with an illness or diseases that will require more coverage.

What can you do about it?

The obvious answer to this, is to ensure you’re taking good care of your health! However, we do understand that life is uncertain and sometimes no matter how careful you are, things do happen!

One recommendation to benefit from advantages like cumulative bonuses is that you can perhaps avoid making small claims during the year.

For example; say you’ve got a fracture during the year – you can choose not to make a claim for the same (since the cost wouldn't be as high as well).

This way, you’ll have no claim history during the year and can get rewarded with an increase in your sum insured, without any increase in your premium.

At least two months before your existing health insurance policy is going to expire, it’s a good idea to review your plan and consider few things before you just blindly renew your plan as it is. Some of the things you should consider while renewing your health insurance policy are:

1. Is your sum insured sufficient?

Maybe you opted for the minimum sum insured at the time of purchase or higher and you realize your coverage is either too less, or too much for your needs.

Most insurers will give you the option to increase your sum insured at the time of renewal. They may ask you reasons why and based on the same increase your health insurance premium basis how much you decide to increase your sum insured by. 

2. Would you like to add any family members?

Perhaps you’ve just started a family or have decided that you want to add your spouse to your health insurance plan as well. Consider these things, and let your insurer know about any new member additions.

You can also choose between either including family members within your plan by shifting to a family floater option or simply buy individual plans for each member. 

3. What about add-ons?

Another thing to consider during your renewal is whether you’d like to opt for new add-on covers or not. For example: Maybe until now you didn’t opt for any add-ons in your plan but would like to now opt for the maternity and newborn baby cover. In this case, let your insurer know and add it in your health insurance plan during renewal. 

4. Are you happy with your existing health insurer, do you want to consider porting?

Many people port their health insurance plans when they’re not happy with their existing insurer. This could be due to the coverage benefits or simply because of its service and processes too.

However, porting can only be done at the time of renewal. Most importantly, you have to let your current insurer know about the same at least 45-days before the expiry date so that they can make the change.

In case you’re not happy with your insurer, evaluate and compare health insurance plans online and port to a plan and insurer that works best for you. 

5. Do you want changes in your coverage?

Now, apart from your sum insured and opting for new covers, you should also review your health insurance plan overall to see if you would like any other changes in your coverage or not.

For example: Say you’ve opted for a basic coverage plan and now want to shift to a comprehensive plan with more benefits. In this case, you can check with your insurer if you can change your choice of plan and accordingly get it done at the time of your health insurance renewal.