Is there a limit on how much insurance companies can increase renewal premiums by? As individuals age, could they face a 40-50% hike in premiums?
—Name withheld on request.
Unfortunately, there’s currently no cap on health insurance premium increases in India. This, indeed, can be a burden, particularly for older individuals. While premiums can rise significantly year after year, the cost of healthcare itself is also climbing. And, without health insurance, managing unexpected medical bills can be even more challenging.
Until there’s improved public healthcare or regulations on private hospitals in India, health insurance premiums are likely to continue increasing. Here’s how you can manage:
• Establish a dedicated fund for premiums: Consider creating a dedicated fund specifically to cover future health insurance premiums. This makes budgeting for premiums more manageable, especially since health insurance is typically cheaper than out-of-pocket hospital bills.
• Maintain a backup fund: Health insurance might not cover everything, like routine doctor visits, etc. Creating a separate savings fund for these extra costs is essential, especially as we age, and our healthcare needs often increase.
• Explore super top-up plans: Consider buying a ‘super top-up’ plan alongside your base plan. Super top-up plans typically have lower premiums and only kick in after you’ve reached a certain threshold (deductible). So, even if the base plan becomes expensive over time, the super top-up may remain more affordable. Let’s say you have a base plan that covers up to ₹10 lakh and a super top-up that covers anything above ₹10 lakh. If most of your claims are under ₹10 lakh, the premium for the super top-up will remain low. And if the base plan’s premium gets really high, you could even drop it and keep the super top-up for major expenses. Sure, paying ₹10 lakh out of pocket might not be ideal, but this is like a worst-case scenario plan—it’s better to pay a lower premium now than risk not being able to afford a hospital bill later.
When it’s time to renew a health insurance policy, is it necessary to disclose any new illnesses, ailments or surgeries experienced within the last 12 months since the previous renewal?
—Name withheld on request.
This is a common question most people have regarding health insurance renewal.
Well, you generally don’t need to disclose new medical conditions during health insurance renewal if the condition arose after your policy was initially issued. However, there are a few exceptions you should keep in mind:
• If the insurer asks: During the renewal process, if your insurer specifically asks for disclosures on your health or any new medical conditions you’re diagnosed with, etc., then it’s crucial to inform them. Make sure you are honest and truthful in your answers—withholding information could jeopardize your coverage or future claims.
• Upgrading your coverage: If you’re increasing the sum insured under your policy during renewal, you will need to disclose any new medical conditions.
Aayush Dubey is co-founder and head of research at Beshak.org.
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Published: 09 Jun 2024, 03:54 PM IST