Health Insurance Premium Increases During Renewal. Here’s Why

Posted on: Mar 27, 2023 | | Written by: HDFC ERGO Team

Health Insurance Premium Increases During Renewal. Here’s Why

Imagine receiving a notification from your insurance provider that your health insurance renewal premium is set to increase significantly. You might be left wondering why your insurance premium is increasing when you haven’t made any claims or why it’s higher than what your friend is paying for the same coverage. There are several reasons why health insurance premiums increase on renewal, and it’s essential to understand them to make informed decisions about your coverage. Let’s explore the factors contributing to health insurance premium increases on renewal and discuss how to manage these costs.

Reasons why your health insurance premium may increase on renewal

1. Age:

As you get older, your risk of developing health conditions increases, and health insurance providers take this into account when calculating premiums. Thus, premiums tend to increase as you age.

Possible solution: Consider your insurance needs according to your age and lifestyle. If you think you are young and there is little chance of you developing any critical illness, opt for a smaller sum insured. But your parents will need higher coverage.

2. Inflation:

The cost of healthcare in the country increases due to inflation, and health insurance providers adjust their premiums to keep up with these costs.

Possible solution: You can’t singlehandedly beat inflation. However, you can research more about discounts and compare various plans. A thorough analysis will help you zero in on a plan that offers adequate coverage at a pocket-friendly premium.

3. Claim history:

If you’ve made claims or used your best health insurance in India extensively in the past years, the insurance provider may increase your health insurance renewal premium to account for the increased risk.

Possible solution: You can always consider switching to another insurer who offers you a better deal which can be done only during policy renewal.

4. Changes in policy features:

Insurance providers may introduce new features, coverages, or benefits that increase the overall cost of the policy. Insurers, at times, incur costs in administering policies, such as processing claims and managing customer service, which can contribute to premium increases. Or you may want to widen the scope of your coverage. In both cases, the premiums will go up.

Possible solutions: Review your healthcare plan properly and cut down any benefits that look unnecessary.

5. Medical underwriting:

If your health status has changed during the policy period or you have developed a new medical condition, the insurance provider may increase your health insurance renewal premium or impose exclusions or waiting periods for certain conditions.

Possible solution: While one should take good care of health, illnesses can’t be predicted. However, you can develop financially-prudent habits like not making claims for smaller issues. That way, the No-Claim Bonus accumulated over the years will help you get rewarded with an increased sum insured or lower premiums.

Things to keep in mind while renewing your health insurance

When renewing your health insurance, there are several factors to consider to ensure that you have the right coverage at the best price:

1. Review your coverage:

Take a closer look at your existing policy to understand what it covers and doesn’t. From sum insured to other benefits, make sure that it meets your current healthcare needs and consider if any additional coverage is necessary.

2. Check the network of hospitals:

Ensure that your preferred healthcare providers (clinics and hospitals) are part of the network hospital of your insurance provider so that you can avail of cashless claims. If it is a non-network hospital, you have to pay the bills upfront and get them reimbursed later. You can change the provider when you renew health insurance and go for one which has a wide network of hospitals.

3. Understand the premium increase:

Take the time to understand why your premium is increasing and what factors are contributing to it. If the increase seems unreasonable, consider shopping around for alternative plans.

4. Review the policy exclusions:

Check for any exclusions in your policy, such as pre-existing conditions, maternity cover, or mental health coverage. Don’t withhold any information about your health from the insurer, or your claim request will be denied. Ensure that your policy covers your specific healthcare needs.

5. Type of plan picked:

Imagine that till last year, you weren’t married and banked on individual plans. Now, you want to opt for a family health insurance plan to protect yourself and your partner. Similarly, evaluate if you want an individual plan for each family member or a family floater policy.

6. Add-ons:

Would you like new add-on covers this year? Maybe until now, you didn’t feel the need for add-ons in your plan, but now it seems beneficial. For example, opting for maternity and newborn baby coverage after marriage is a wise call.

Tips on renewing your health insurance and saving on health insurance premiums during renewal

• Compare plans:

Compare policies from different insurance providers to ensure you get the best value for your money. Consider factors such as premiums, deductibles, co-payments, and out-of-pocket expenses. And don’t wait until the expiry date to start the hunt.

• Look for discounts:

Some insurance providers offer discounts for healthy lifestyles or purchasing coverage for an extended period. Check to see if you’re eligible for any discounts before renewing your policy.

• Renew on time:

Make sure you renew your policy on time to avoid a lapse in coverage. A lapse in coverage can lead to higher premiums or exclusions in your policy.

• Choose a higher deductible:

Opting for a higher deductible can lower your premium. However, make sure you can afford to pay the deductible in case of a medical emergency.

• Stay healthy:

Maintaining a healthy lifestyle can help you save on your health insurance premium. Some insurers offer discounts or incentives for healthy behaviours, such as regular exercise or non-smoking.

• Negotiate with your insurance provider:

You may be able to negotiate with your insurance provider for a better rate or to waive certain fees. This is especially true if you’ve been a loyal customer and haven’t made many claims.

Conclusion

Health insurance premium increases on renewal due to several factors. This can impact the insurer's ability to provide coverage at the same rates, resulting in an increase in premiums for policyholders. To mitigate the impact of premium increases, shopping around, comparing policies, and negotiating with insurance providers is important. Understanding the reasons for premium increases and taking steps to minimise the impact can help individuals make informed decisions about their health insurance and ensure they have the necessary coverage.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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