With rising medical costs and an unusually high number of claims due to the Covid-19 pandemic, it is no surprise that recent months have seen an increase in health insurance premiums. This, coupled with abnormally high inflation rates, may appear to be cause for concern for policyholders.
According to a recent study by Motilal Oswal Financial Services, India has the highest medical inflation rate among all Asian countries with a 14% increase in the cost of medical care in 2021. That is more than China ( 12%), Indonesia (10%) and Vietnam (10%). So, despite the increase in premiums, you should not ignore the importance of being covered as well as your family. Here are some things to keep in mind when renewing your health insurance policy in the face of higher premiums:
Renew vs Buy
The first question that may come to your mind might be “why should you pay a higher premium for the same policy when you can get a cheaper alternative plan in the market?” However, you should keep in mind that continuing your health insurance policy has several benefits. First, you get a no-claims bonus in the form of enhanced coverage. Also, you may have already completed the elimination period for certain specified conditions. If you let your policy expire, you may have to start the waiting period again. However, under the latest rules, you can switch to a new policy from the same different insurer and still retain some of the benefits, including waiting times. In any case, do not decide in haste.
Review Sum Insured
With the cost of medical care rising, the sum insured that you may have thought was sufficient a few years ago may no longer be enough. The time of renewal is a great opportunity to review the sum insured and increase it if necessary. One might consider opting for coverage from Rs 50 lakh to Rs 1 crore as they have become quite affordable. For example, Rs 1 crore health insurance can cost as little as Rs 10,680 per year if you buy it at age 25.
Explore EMI options
For many people, the health insurance premium hike could be an unexpected setback at renewal time because they hadn’t anticipated this additional expense. To overcome this, you can explore EMI options, which are now available to pay the premium with most insurers. Thus, one does not have to worry about paying the entire annual premium at one time and one can simply make affordable monthly payments.
Consider additional benefits
Your policy renewal date is a good time to consider adding additional riders to your current policy. When purchasing the policy, you may not have given much thought to the added benefits of the endorsement to supplement your policy, you can now.
For example, you can add a room rent waiver benefit that lets you opt for a room with a higher sublimit or no sublimit. You can also choose critical illness cover. If you recently got married or plan to do so,
you could add a maternity rider to your plan. There are several other add-ons that you can use to customize your font.
Go long term
These days, several insurers offer two- and three-year health insurance policies in which you can get a discount on the premium. It’s better than opting for a one-year policy, followed by a renewal. Not only do you get an initial reduction, but you are also protected against any premium increases that may occur next year. It is wise to consider a long term plan if the option is available.
Don’t be afraid of increases in health insurance premiums. Although it pinches your pocket, just remember that the little extra you pay would cover you against a much higher risk. Plus, you need to focus on getting the right coverage and additional benefits to make up for the extra money you’re paying to cover yourself.
(The author is the business leader of health and travel insurance at