There are many creative ways to invest in health. These could be buying nutritious food, getting a gym membership and indulging yourself in stress busting hobbies.
Another one of the most critical ways to invest in health is to purchase a healthcare insurance policy. Medical emergencies can happen anytime due to which a valid health insurance policy is non-negotiable. Not only does it save you from extravagant spending on medical facilities, a healthcare insurance policy can ensure you receive the best treatment if and when that happens.
However, many people have concerns regarding the growing rate of health insurance premiums every year. Even though it seems like a big investment to make every year, opting out of a health insurance policy is a risk you should never take.
In this guide, we’ll tell you why the health insurance premium increases every year and how you can reduce it.
Featured Partners
1
Aditya Birla Activ Fit Health Insurance
Sum Insured
INR 2 lakh to INR 2 crore
Network Hospitals
9,000+
Minimum and Maximum age
5 years and no limit
On Aditya Birla's secure website
2
Tata AIG Health Insurance
Tax Benefit
Upto INR 75,000
Cashless Hospitals
10,000+
Claim Settlement Ratio
94.21%
On TATA AIG's secure website
3
Acko Health Insurance
Initial waiting period
0 Days
Claim Settlement Ratio
98%
Other Benefits
No room rent limit, 100% Bills covered
On Acko's secure website
How Does Health Insurance Work
Health insurance needs no introduction. These days, almost everyone is a beneficiary of a health insurance plan. Big and small organizations alike tend to include health insurance for their employees. The government of India has curated national and state specific healthcare policies for the lower income class. Possessing health insurance has also become commonplace especially after the Covid-19 pandemic.
The premise of health insurance is simple. In case you face a medical emergency, your insurer will pay for all the medical expenses based on the policy’s terms and conditions. Moreover, most insurers and hospitals have tie-ups that provide cashless claims facilities. This means that you will not have to pay a single penny as your insurer will directly pay your hospital.
Health insurance policies are also designed to fulfill all your needs. There are policies that cover hospitalization room rent, ambulance charge, pre and post hospitalization care, consultation fees and more. This allows you to stay rest assured at every step of the journey of receiving medical care.
You can easily purchase and renew health insurance policies online. The process of purchasing health insurance policies is super simple and has several more benefits that we will talk about in detail.
Benefits of Health Insurance Policies
Before we dive into understanding why the premiums of health insurance policies increase every year, it is important to understand the benefits that health insurance policies offer that are listed below.
Hospitalization Cost: Ofcourse, hospital bills shoot up for every treatment and that too when they’re least expected. That’s where health insurance saves the day. Many health insurance policies ensure that you receive the best treatment experience when admitted to a hospital so you can recover quickly and easily. This includes room charges, doctor’s fees, surgery charges as well as charges for prescribed diagnostic tests.
Pre- and Post-hospitalization Care: Health insurance policies have also started providing coverage for expenditures related to consultations and treatments done before the hospitalization as well as follow ups done after the hospitalization. This really helps the policy holder to avoid spending an extraordinary amount of money.
Diagnostic Tests and Check Ups: Many healthcare insurance providers also include annual health check ups for policyholders that do not require extra payment. These help to keep policyholders aware of their health as well as detect early signs of ailments.
Income Tax Rebate: The government of India provides rebates on income tax payments of up to INR 50,000/- for policyholders based on various circ*mstances. This is a major cost-effective benefit of purchasing healthcare insurance.
Factors Affecting Health Insurance Premiums
There are several factors due to which health insurance premiums rise with every year passing by. While some of these may not apply to your personal circ*mstance, many of them are unavoidable. Knowing the factors that affect health insurance premiums can help you plan ahead. This may also help you select insurance policies with terms and conditions that do not require you to pay significantly more every year.
The factors affecting health insurance premiums are:
Your Age: It is no secret that you are at your best health when you are young. As you age, you are likely to incur more expenses on medical care and for this reason, your insurance policy premium will increase as you age.
Your Family: If you are at a stage of life where you wish to provide your family, such as parents, spouses or children, with healthcare insurance then the premium of the health care policy will also increase. However, you can avail cost effective family floater insurance policy offers through this way.
Your Insurance Claim History: If you have claimed insurance several times in the past, some insurance providers are likely to increase the rate of the premium. In this scenario, it is important to read the terms and conditions of the policy carefully.
Inflation in the Healthcare Industry: The healthcare industry is prone to inflation every year and due to this factor, insurance providers also increase the premiums for their policy offerings. This means you are likely to incur some increment in the premiums even if all other factors do not affect you.
Changes in Requirements: Your policy premium could increase in case there is a change in your requirements related to healthcare, such as planned hospitalization for a surgery, ongoing treatments, opting for family floater coverage.
Featured Partners
1
Aditya Birla Activ Fit Health Insurance
Sum Insured
INR 2 lakh to INR 2 crore
Network Hospitals
9,000+
Minimum and Maximum age
5 years and no limit
On Aditya Birla's secure website
2
Tata AIG Health Insurance
Tax Benefit
Upto INR 75,000
Cashless Hospitals
10,000+
Claim Settlement Ratio
94.21%
On TATA AIG's secure website
3
Acko Health Insurance
Initial waiting period
0 Days
Claim Settlement Ratio
98%
Other Benefits
No room rent limit, 100% Bills covered
On Acko's secure website
How to Reduce Health Insurance Premium
While health insurance is non-negotiable, of course, there is a way out of everything. In this case, we’ll discuss the various ways out of spending too much on health insurance.
Take long-term plans: Insurance providers generally pack many features and benefits into long term policy plans that are also more cost effective than paying monthly premiums. Opting for annual, or three-year, five-year plans will be more cost effective in the longer run. It is also convenient as you will not have to remember renewal dates.
Renew on time or even earlier: Renewing on time is as important as it is a hassle. Nobody will remember policy renewal dates unless reminded frequently. Many insurance providers provide discounts and offers on renewing before time which you must look out for.
Consider Add-ons wisely: While add-ons can prove to be highly beneficial, it is important to consider which ones will be most effective for your requirement. However, prioritizing health is foremost when making such critical decisions. Saving a few extra bucks could cause a serious financial burden in case of a medical emergency.
Use No Claim Bonus (NCB): The option of NCB is truly a secret weapon when it comes to reducing the insurance health premium. If you haven’t applied for an insurance claim, your insurance provider is likely to give you a NCB which means you will receive a discounted premium on the renewal of your policy.
Frequently Asked Questions (FAQs)
Does health insurance premium increase every year?
Yes, health insurance premiums do tend to increase every year, although nominally. The factors that affect the increase range from growing age that can cause deterioration in health, health care history or any detected diseases, previous claim history and inflation in the healthcare industry.
Can I reduce health insurance premiums from increasing every year?
Yes, there are a few ways through which you can get discounts on your insurance premiums or make cost effective purchases. These are using the No Claim Bonus feature, decreasing the policy’s add-ons, renewing on time and opting for long term plans.
Is it important to purchase health insurance policies?
Yes, it is absolutely critical to keep a valid health insurance policy. Medical emergencies can occur anytime and an insurance policy helps you avoid financial burden during stressful times. You can also get income tax rebates for investing in a valid insurance policy.
Which health insurance policy should I buy?
The answer to this depends on your requirements, circ*mstances and budget. Your requirements could include your family, your income, specific add-ons related to diagnostic health check ups, or specialized treatment covers. There are many options to consider from various insurance providers. To know the best health insurance plans, read this detailed guide on Forbes Advisor India.
