Does Health Insurance Premium Increase on Renewal?

Renewing your health insurance policy should be a straightforward process, right? But many policyholders are caught off guard when they notice that premiums have increased even though they haven’t made significant changes to their coverage.

Why Does Health Insurance Premium Increase at Renewal?

Let’s explore some of the major contributors to rising premiums.

1. Age Factor

As you grow older, your susceptibility to health risks also increases. Insurance companies often adjust premiums based on age slabs. For example:

• Individuals moving from the 30–35 bracket to 36–40 may see a noticeable jump.
• Senior citizens usually face more hikes.

2. Medical Inflation

The cost of healthcare in India is rising every year. According to data, medical inflation is currently hovering around 14%, significantly higher than the general inflation rate. As treatment costs rise, insurers adjust premiums to cover potential future payouts.

3. Claim History

A high frequency of claims or a large claim amount may affect your policy premium. Some insurers may offer a bonus for not claiming and the absence of this bonus during high-claim years can raise your premium.

4. Policy Upgrades

Sometimes, your premium increases because of:

• Opting for a higher sum insured
• Adding new family members
• Including riders like maternity, critical illness or personal accident cover

5. Changes in Underwriting Guidelines

Insurance companies occasionally revise their underwriting norms. These changes, which may stem from regulatory updates or actuarial evaluations, can result in higher premiums across age groups or policy categories.

6. Geographical Impact

If you’ve shifted to a city with higher healthcare costs, insurers may adjust premiums based on regional treatment expenses.

How to Anticipate Your Renewal Premium

It helps to be proactive when it comes to policy renewal. Here’s what you can do:

1.      Use Health Insurance Calculator

Before your policy is due, use a health insurance premium calculator to estimate your renewal premium based on your age, sum insured, family details and other coverage features.

2.      Check Renewal Terms

Carefully read through your renewal documents. Insurers often mention any increase in premiums along with the reason.

3.      Review Policy Features

If you’ve added any riders or made modifications to the policy, the new features might contribute to the cost. Reevaluating your needs helps avoid unnecessary expenses.

Tips to Manage or Reduce Rising Premiums

Now that you know why premiums may increase, here is how to control them without compromising your healthcare coverage:

1. Maintain a Healthy Lifestyle

Some insurers reward policyholders for maintaining good health through wellness programmes. Staying fit, not smoking and managing chronic conditions may help reduce your risk profile.

2. Compare Policies Before Renewal

Purchasing health insurance online allows you to compare multiple plans. If your current insurer has increased the premium excessively, consider porting your policy to another provider with similar benefits.

3. Opt for Co-payment or Deductibles

If you are comfortable bearing a portion of the medical expenses, choosing a co-pay or deductible option can lower your premium.

4. Choose Long-Term Plans

Some insurers offer discounts if you pay for two or three years in advance. This can help lock in a lower premium and shield you from annual hikes.

Conclusion

Health insurance is not just a yearly expense; it’s an essential part of your financial and healthcare planning. While a rise in premiums on renewal may feel inconvenient, understanding the reasons behind it and knowing how to manage it gives you more control.

So, don’t be caught unaware. Plan your renewal in advance by using a health insurance calculator and consider comparing health insurance online to ensure you get the best value for your money.

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