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Does health insurance premium increase every year?

Having a health insurance policy is critical in today’s day and age, where illnesses and diseases are rampant. Having a health cover will not reduce the chance of being diagnosed with a medical condition but it will at least provide a financial cushion in the event of hospitalization.

You may also have the question “Do health insurance premiums insurance every year?” The answer is no. Health insurance premiums do not increase every year, they increase periodically based on age slabs. Let us understand this with a simple example.

Let us assume that Mr. Rakesh (aged 24) bought a health cover from Reliance Health Insurance, paying a premium of Rs.10,000. Mr. Rakesh will continue paying Rs.10,000 till the age of 30. Then post the age of 30, his premium will increase to Rs.15,000. He will continue paying Rs.15,000 from the age of 31 to the age of 45. Then post 45 his premium will again increase. This is how a health insurance premium generally increases.

an example of a premium slab
This is an example of a premium slab

Why does health insurance premium increase?

Now, let us find out why health insurance premiums increase.

  • Medical inflation has been increasing at 15% a year compared to general inflation which is increasing at 6-7% a year. The insurance companies need to account for this by charging higher insurance premium.
  • As talked about before, health insurance companies also increase the premium based on age slabs. As and when a person enters a particular age slab, his health insurance premium will increase accordingly (Kindly refer to Mr. Rakesh’s example above).
  • The premium will also increase if the policyholder purchases additional riders that increase coverage.

How can I counter the increase in premiums?

Let us now talk about some of the ways a policyholder can reduce his premium load in the face of constantly increasing premiums.

  • A policyholder can find a different policy with a different insurance company, and port his existing policy to a different policy. This is called as porting of a health insurance policy. One should ensure that the benefits and coverage of both policies are the same, only the price factor should be different. That way, you get the same benefits at a lower price.
  • A policyholder can also opt for a family floater plan. This is where the entire family is covered under a single health insurance policy.
  • Ask your insurance agent to give you the best possible deals. If you do not ask, you may miss out on any new deals, offers and benefits.
$ Billion
Gross premium collected by General Insurance Companies in India (As of 2022)
$ Billion
Gross premium collected by Life Insurance Companies in India (As of 2022)
% Insurance Penetration
Total life insurance penetration stands at a slender 3.2% (As of 2021)

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Frequently asked questions about health insurance premiums

  • Does health insurance premium increase every year?

    No, it increases based on the age slab that the policyholder falls within.

  • Is health insurance premium calculated on a person's age?

    Yes, the primary metric in calculating the premium rate is the age of the person.

  • Can I port my health insurance policy to another insurance company?

    Yes, porting your insurance policy is now possible.

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