Will My Health Insurance Premium Go Up When I Renew?

Vote: 1

Yes, your health insurance premiums can increase during renewal. The reason is clearly because of rising medical inflation, increasing age, and higher claim history.


Mostly during your policy tenure, insurers reassess risk, which can influence your renewal cost. This is why you should proactively compare plans, review coverage, and maintain a healthy lifestyle to easily manage or even reduce your premium.


What are the Reasons for the Rise in Premiums on Renewal?



  1. Insured’s Age


With growing age, policyholders become more prone to chronic diseases and injuries, which will require frequent hospitalisation. Therefore, to manage the risk of frequent claims, insurers often impose a higher premium during renewal.



  1. Medical Inflation


According to a report of The Economic Times, medical inflation in India is rising around 12-15% annually, which is one of the highest in Asia. This is why, to cope with these rising expenses of hospitalisation, medicine, surgery, and diagnosis, your insurer can increase your premium during renewal.



  1. Multiple Claims


Premiums for a health insurance plan are highly influenced by policyholders' claim history. So, if you made frequent claims during one policy year, it makes your profile high-risk. Thus, to manage the potential expenses, your insurer is likely to impose a premium loading during renewal.



  1. Increasing Coverage Benefits


Your medical needs tend to evolve with time. Thus, as your coverage benefits increase, the premiums during renewal also get a hike.


For example, you might be single when you purchased the policy, but now you have a family with dependent children. In this situation, you are likely to increase your sum insured or add riders like critical illness cover or personal accident cover to secure your family's future.


How Can I Keep the Premium Low?



  • Use Portability Options:As your renewal date comes closer, you should compare other available options with low premiums. You can easily port to a different policy without losing accumulated benefits, such as waiting period and no-claim bonus credits.



  • Apply No-Claim Bonus:Most health insurance companies in India offer No Claim Bonus (NCB) for every claim-free year. So, if you remain claim-free, apply this bonus during renewal to get up to 50% discount on the premium.



  • Get Wellness Benefit:Insurers help policyholders earn up to a 20% discount on renewal premiums by accumulating points through healthy activities, such as walking, health risk assessments (HRA), and preventive check-ups.



  • Buy Early:To keep premiums affordable during renewal, buy a healthcare policy in your 20s. Since the health risks are often low during a young age, you can accumulate a high NCB discount for the future.


Final Words


Although premiums can increase while renewing health insurance, early planning helps you keep the plan affordable. From buying the policy early to using the no-claim bonus, with these crucial tips, you can effectively reduce the costs without compromising on the coverage.


In fact, if you are not happy with your existing policy, you can easily switch to a plan offering better benefits at a lower cost.