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Does Health Insurance Premium Increase Every Year 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.

Team Digit

Does Health Insurance Premium Increase?
Factors Affecting Premiums
How to Reduce Premium?
Things to Consider
Tips on Renewing Your Health Insurance
Frequently Asked Questions

Does Health Insurance Premium Increase Every Year?

Yes, health insurance premiums can increase every year due to several factors. These include medical inflation, the policyholder's age, the number of claims made, changes in lifestyle, and new regulations or coverage adjustments by insurers.

While premium increases are common, the extent of the hike can vary. Some insurers may offer policies with fixed premiums for a specific term, providing some predictability.

Factors That Affect Health Insurance Premium

#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 the cost of medicines, hospital admission charges, the 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 can you 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 in health insurance, 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 Digit health insurance – 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 ₹25,000 or ₹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 can you 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 that your health insurance premium is generally dependent on various factors, including your age.

In some cases, an increase in age can also affect your health insurance premium on renewal. This is especially true for those approaching 60 years of age during or just before renewal.

What can you do about it?

You can’t turn back time and turn younger, but what you can do is be mindful of 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 health insurance 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 might decide to update your health insurance for more coverage if your situation changes—like wanting maternity benefits or if you've been diagnosed with a condition that needs extra care. If you add extra coverage or increase the total amount your insurance covers, your premium—what you pay for the insurance—will go up accordingly.

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 a critical illness or disease 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.

How to Reduce Health Insurance Premium at the Time of Renewal?

At the time of renewing your health insurance policy, there are several options you can consider to reduce your premium while staying within the guidelines set by the Insurance Regulatory and Development Authority of India (IRDAI). Here's how you can achieve this:

Opt for a Higher Deductible

At renewal, you can choose a higher deductible amount. A higher deductible lowers your premium since you're agreeing to pay more out-of-pocket before the insurance coverage starts.

Adjust Your Coverage

Review and possibly reduce your sum insured or remove any unnecessary riders or add-ons that you may no longer need. For example, if you previously added maternity benefits but no longer require them, removing such add-ons can reduce the premium.

Utilize the No-Claim Bonus (NCB)

If you haven't made any claims during the policy term, your insurer may offer a No-Claim Bonus (NCB), which can either increase your coverage without raising the premium or directly reduce your premium amount.

Consider Co-Payment Options

At the time of renewal, you can opt for a co-payment clause, where you agree to pay a certain percentage of the claim amount. This reduces the premium since you're sharing the risk with the insurer.

Switch to a Family Floater Plan

If you have individual policies for each family member, consider switching to a family floater plan at renewal. Family floater plans often come with lower premiums compared to the total premium of individual plans.

Port Your Policy to Another Insurer

If your current insurer’s renewal premium is too high, you can port your policy to another insurer offering similar or better benefits at a lower premium. IRDAI allows you to carry forward accrued benefits, like the No-Claim Bonus, when you switch insurers.

Choose a Lower Sum Insured

If your current sum insured is higher than what you realistically need, consider lowering it at renewal. This will directly reduce your premium.

Things to Consider While Renewing Your Health Insurance

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 a 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:

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 little 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 your reasons and, based on the same, increase your health insurance premium basis how much you decide to increase your sum insured.

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 buying individual plans for each member.

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 opt for the maternity and newborn baby cover. In this case, let your insurer know and add it to your health insurance plan during renewal.

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.

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.

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 get it done accordingly at the time of your health insurance renewal.

Tips on Renewing Your Health Insurance on Saving Premiums During Renewal

Always start the process of reviewing and renewing your health insurance policy in advance, waiting until the expiry date is always a bad idea! At least starting 45-days is a good way to think about it! This way, you will not miss out on any renewal benefits or bonuses either (renewal benefits and any special bonuses will not be applicable if you don’t renew your policy before its expiry date).
If you are renewing or buying new individual health insurance plans for your family members, then don’t blindly pick the same sum insured for all. Healthcare needs change with age, so choose the sum insured for your family members accordingly. For example, your young kids can do it with minimum coverage of 1-2 lakhs, but maybe your parents may need a higher sum insured of 5 to 10 lakhs. Choosing the right sum insured will directly impact your premium and may also help you save some money.
Suppose you’ve been diagnosed with a new illness or disease during the year. In that case, it’s best to disclose this to your insurer during renewal and check diligently regarding the coverage of the same in your policy so you’re not up for any last-minute surprises during claims!
Check your policy to see what the renewal benefits your insurer offers. So you can ensure you get them during your health insurance renewal.

FAQs about Health Insurance Premiums Increase on Renewal

All

Why do health insurance premiums go up every year?

Health insurance premiums typically rise due to medical inflation, which reflects the increased cost of healthcare services and treatments. Additionally, as policyholders age, the risk of illness or hospitalization increases, prompting insurers to adjust premiums accordingly. Other factors include claim history, where frequent claims can lead to higher premiums, and enhancements in policy coverage, such as the inclusion of new treatments or expanded benefits.

Is it normal for my health insurance premium to increase every year?

Yes, it is normal for health insurance premiums to increase annually. This increase is driven by factors such as the rising cost of healthcare, the age of the insured, and the overall risk assessment of the insurance pool. The IRDAI ensures that these increases are justified and within regulatory limits, providing a check against unfair premium hikes.

What can I do to minimise premium increases?

To minimize premium increases, consider the following:

Opt for higher deductibles: A higher deductible lowers the premium but means you pay more out-of-pocket in the event of a claim.
Avoid making small claims: Accumulating a no-claim bonus can lead to discounts on future premiums.
Maintain a healthy lifestyle: Some insurers offer discounts or incentives for maintaining good health, such as not smoking or managing chronic conditions.
Review your coverage: Regularly assess your insurance needs and remove unnecessary riders or coverage to reduce costs.

How much does inflation typically affect health insurance premiums?

Inflation significantly impacts health insurance premiums. The rate of medical inflation in India often exceeds general inflation, which means healthcare costs rise faster than other consumer goods and services. As healthcare costs rise, insurance companies adjust premiums to cover the increased risk of paying out higher claims amounts.

Do all insurers raise premiums based on claims history?

No, not all insurers raise premiums based on claims history, but many do, as it reflects a higher risk to the insurer.

If I'm getting older, will my premium automatically increase?

Yes, as you age, your health insurance premium often increases due to the higher risk of health issues.

Can I switch insurers to avoid premium increases?

Yes, you can switch insurers to avoid or minimize premium increases through a process known as portability. The IRDAI mandates that insurers must allow policyholders to transfer their policies to another insurer without losing the accumulated benefits, such as the waiting period for pre-existing conditions. However, it's essential to compare new policies carefully to ensure the coverage and benefits match or exceed your current plan.

Are there any discounts available for healthy habits?

Yes, many insurers offer discounts or rewards for healthy habits, such as maintaining an ideal weight, not smoking, or regularly participating in wellness programs. These discounts can help reduce your premium costs.

Is it worth increasing my Health Insurance premium?

Yes, increasing your premium can be worth it if it results in better coverage, such as a higher sum insured or additional benefits like coverage for critical illnesses or more extensive network hospitals. The key is to balance the cost with the potential benefits, ensuring the plan meets your healthcare needs without straining your finances.

What's the relation between Health Insurance and aging?

As you age, the likelihood of needing medical care increases, which in turn raises the risk for insurers. This relationship between aging and health insurance is reflected in higher premiums for older individuals. Preparing for these costs by purchasing a policy early in life or opting for a long-term plan can help manage future premium increases.

How can I prepare for the rising Health Insurance costs as I age?

To be prepared for the rising health insurance costs, you should consider increasing your coverage early, exploring supplemental insurance, and saving specifically for healthcare costs.

What is the benefit of paying higher Health Insurance premiums?

Higher premiums often mean better coverage, lower deductibles, and more comprehensive benefits.

Does health insurance premium increase with age on renewal?

Yes, health insurance premiums generally increase with age upon renewal. This is because older individuals are statistically more likely to require medical care, leading to higher risk for the insurer.

What does it mean when insurance premiums increase?

An increase in premiums usually reflects higher perceived risk by the insurer or rising costs of providing coverage.

Can health insurance companies raise premiums without notice in India?

No, in India, health insurance companies cannot raise premiums without notice. The IRDAI requires insurers to provide clear communication about any premium changes at the time of renewal. Additionally, policyholders have the right to cancel the policy or switch insurers if they do not agree with the new premium rates.

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Go Digit General Insurance Limited | Corporate Office Address: Atlantis, 95, 4th B Cross Road, Koramangala Industrial Layout, 5th Block, Bengaluru 560095 | Registered Office Address: 1 to 6 floors, Ananta One (AR One), Pride Hotel Lane, Narveer Tanaji Wadi, Shivaji Nagar, Pune-411005, Maharashtra | Trade logo of Go Digit General Insurance Ltd. displayed above belongs to Go Digit lnfoworks Services Private Limited and is provided and used by Go Digit General Insurance Ltd. under license.

Does Health Insurance Premium Increase Every Year on Renewal?

Table of Contents

Does Health Insurance Premium Increase Every Year?

Factors That Affect Health Insurance Premium

#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 the cost of medicines, hospital admission charges, the cost of various treatments, medical advancements, and so on.

#2 Your Claim History

#3 Your Age

#4 Change in Coverage Benefits

#5 Your Health and Wellbeing

How to Reduce Health Insurance Premium at the Time of Renewal?

Things to Consider While Renewing Your Health Insurance

Is your Sum Insured sufficient?

Would You Like to Add Any Family Members?

What About Add-ons?

Are You Happy With Your Existing Health Insurer? Do You Want to Consider Porting?

Do You Want Changes in Your Coverage?

Tips on Renewing Your Health Insurance on Saving Premiums During Renewal

FAQs about Health Insurance Premiums Increase on Renewal

Why do health insurance premiums go up every year?

Is it normal for my health insurance premium to increase every year?

What can I do to minimise premium increases?

How much does inflation typically affect health insurance premiums?

Do all insurers raise premiums based on claims history?

If I'm getting older, will my premium automatically increase?

Can I switch insurers to avoid premium increases?

Are there any discounts available for healthy habits?

Is it worth increasing my Health Insurance premium?

What's the relation between Health Insurance and aging?

How can I prepare for the rising Health Insurance costs as I age?

What is the benefit of paying higher Health Insurance premiums?

Does health insurance premium increase with age on renewal?

What does it mean when insurance premiums increase?

Can health insurance companies raise premiums without notice in India?

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