Does Health Insurance Premium Increase Every Year on Renewal?
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How to Reduce Health Insurance Premium at the Time of Renewal?
At the time of renewing health insurance policy, there are several ways you can 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:
What Should You Check Before Renewing Your Health Insurance Policy?
At least two months before your existing health insurance policy is going to expire, it’s a good idea to consider some important things to check before renewing a health insurance policy:
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. Hence, it is important to check whether your current coverage is still enough for today's medical costs and your family's healthcare needs.
Perhaps you’ve just started a family or have decided that you want to add your spouse to your health insurance plan as well. Hence, consider adding your spouse, newborn child, or other eligible dependents if your family circumstances have changed.
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.
Another thing to check 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.
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: You’ve opted for a basic coverage plan and now want to shift to a comprehensive health insurance 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.
If you've had a claim-free year, check whether you've earned a No Claim Bonus (NCB) or any other renewal benefits under your policy. Your insurer might provide you with a discount on your premium amount or increase your sum insured under your health insurance policy as a reward for making no claims.
Check if your preferred hospitals are still part of the insurer’s cashless network of hospitals. These hospitals may be added or removed during the year. Currently, Digit has 9000+ network hospitals that offer smooth, cashless treatment.
Many people port their health insurance plans when they’re not happy with their existing insurers. Consider the insurer's service, claim experience, coverage benefits, and overall policy value before renewing.
However, porting health insurance 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 to port to an insurer and plan that better suits your needs.
5 Common Myths About Health Insurance Renewal Premiums
Many policyholders worry when their health insurance premium changes at renewal. However, several assumptions about renewal premiums are based on misconceptions. Understanding the facts can help you make more informed decisions about your coverage.
Myth 1: My Premium Will Always Stay the Same If I Don't Make a Claim
Fact: A claim-free year does not guarantee that your premium will remain unchanged. Renewal premiums may increase due to factors such as age progression, healthcare inflation, changes in coverage, or insurer-wide premium revisions.
Myth 2: Making One Claim Will Automatically Increase My Premium
Fact: In health insurance, a single claim does not automatically lead to a premium increase. Renewal premiums are influenced by multiple factors, including the insurer's pricing structure, age, coverage level, and overall claims experience.
Myth 3: The Cheapest Renewal Premium is Always the Best Option
Fact: A lower premium may come with lower coverage, higher deductibles, co-payments, exclusions, or fewer benefits. When comparing plans, evaluate the overall coverage and benefits instead of focusing only on the premium amount.
Myth 4: Health Insurance Renewal is Automatic, So There's Nothing to Review
Fact: Ideally, there are very few insurers who provide auto renewal options. Even if your insurer offers auto-renewal, you should still review your sum insured, add-ons, deductibles, family details, and renewal benefits before renewing.
Myth 5: Younger People Don't Need to Worry About Renewal
Fact: Even young policyholders should review their policy at renewal. Life events such as marriage, starting a family, or increasing healthcare costs can affect the type and amount of coverage required.
FAQs about Health Insurance Premiums Increase on Renewal
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.
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, as per IRDAI, you can port your health insurance policy to another insurer at renewal. Before switching, compare coverage, waiting periods, exclusions, benefits, and service quality rather than focusing only on the premium.
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.
Can You Add Family Members During Health Insurance Renewal?
Yes, depending on the policy terms, you may be able to add eligible family members such as a spouse or child at the time of renewal.
When Should You Renew Your Health Insurance Policy?
It is advisable to start reviewing your policy at least 30-45 days before renewal. This gives you enough time to compare plans, review coverage, request changes, or explore portability options if needed.
Does health insurance premium increase with age during 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.
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.
Why does my health insurance premium keep going up every year? Are life insurance policies similar?
Health insurance premiums rise due to factors such as medical inflation (increasing healthcare costs), your age (being older means a higher risk), and sometimes your claims history. Premiums of Life insurance policies also increase with age because the risk of a payout rises as you get older, but term insurance often has a fixed premium for the chosen term