HOW TO REDUCE YOUR HEALTH PREMIUM OUTGO

Health insurance premiums have seen a dramatic rise in the recent years due to a wide range of factors, including rising medical inflation and the rising number of claims.

- Anuradha Mishra

We explore a few ways in which you can reduce your premium costs.

In the aftermath of the Covid-19 pandemic, a lot of people have realised the importance of health insurance. However, a primary concern for most people is the rise in premiums. Over the past few years, health insurance premiums have seen a noticeable upward trend, with different insurers increasing premiums at varying rates for their products.

In a report by Local Circles released in May 2024, 52 per cent of Indians said that their health insurance premiums have increased by over 25 per cent in the last 12 months. The survey was based on 11,000 responses from personal health insurance policyholders located across 324 districts of India.

According to industry experts, the reasons behind this surge in premiums range from business concerns, ageing population, product enhancements, to even medical inflation. Says Parthanil Ghosh, director and chief business officer of HDFC ERGO General Insurance, "Health Insurance in India is still an after-thought proposition and a low-awareness product. Young and healthy people usually do not prioritise purchasing health insurance.

As a result, a greater number of elderly and high-risk individuals remain in the insurance pool, thereby leading to higher premiums. Additionally, people don't buy insurance early and seek coverage usually after the age of 40 (and premiums rise with age)." On April 1, 2024, the Insurance and Regulatory Development Authority of India (Irdai) removed the ceiling of 65 years for individuals to buy a health insurance policy.

The regulatory change suggested that there cannot be an age limit for first-time entry into insurance. For instance, if a 75-year-old wants to buy insurance for the first time, he should not be denied a cover. However, this may or may not increase the numbers of senior takers because of the high premiums charged from older people.