If you have received a message from your insurance company that your health insurance premium is going to increase, then you are not alone. If you have not received any such message, then you will get it very soon. Rising medical inflation and claim settlement have forced the insurance industry to increase health insurance premiums.
Premium increased last year, and will increase this year too!

Local Circles surveyed personal health insurance policyholders earlier this year, in which 52% said that their premiums have already increased by 25% compared to last year. Out of the 18,067 people involved in this survey, 27% said that their premium has increased by 0-25% in the last year, while 14% said that their premium has not increased. The rest did not give a clear answer to this.

According to Nikhil Jha, founder of Hercules Insurance Advisors, most companies are going to increase their premium in the next few months. It is estimated that this increase can be between 5-18%. Nikhil Jha said that major policies like Niva Bupa's Reassure 2.0 are also increasing premiums, as well as Care Supreme Health Insurance or Star Health's Family Health Optima Insurance Plan have seen premiums increase last year. He said that some policies like Star have seen a very sharp jump at the rate of about 60-70%.

Policybazaar Chief Business Officer Amit Chhabra said that premiums are increasing, but it is as usual. After Covid, companies are having to work hard to increase premiums. So while we have seen two consecutive years of increase in premiums, it is still not that much on a CAGR basis. On the other hand, medical inflation is increasing by about 15% annually along with the increasing cases of many health problems.

What is the solution to this problem?

Nikhil Jha says that one way is to buy a multi-year policy. In which the premium can be paid in advance for five years. This is a plan that usually provides coverage for two to five years instead of the standard one-year period. According to HDFC Ergo, buying a multi-year mediclaim plan also gives you the benefit of long-term policy discounts. Most health insurance companies in India offer health insurance discounts of up to 10% on choosing a two-year policy term.

Chhabra said that along with long-term policies, some health insurance companies also offer policies in which the premium is locked. He said that in the case of such policies if the policyholder has not made any claim, the company calculates the premium from the entry age. In such a situation, this policy can prove beneficial for the youth.

Jha said that the disadvantage of long-term policies is that if the company changes the terms and conditions, the policyholder is left with limited options even if they want to exit. According to a note from HDFC Ergo, while purchasing multi-year policy coverage, the calculation process of a claim bonus can also be a bit difficult.

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