Does Health Insurance Premium Change on Renewal?

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6 min read

Updated on Jan 24, 2023

Health insurance has emerged as one of the most important necessities of the present times, especially after the pandemic. But do you know if the  health insurance premiums changes at the time of policy renewal. Let’s find out. 

The demand for health insurance has increased over the last few years because of the constant rise in diseases. Lately, people have realized the need of getting coverage against ailments  and the sudden surge in demand for health plans proves it all.

Though health plans are very important, one must note that the policyholder has to renew the plan regularly every year to avail the benefits covered under the policy. Now, the question is, does the premium amount on health insurance change every time you renew a plan. If so, why? We will find the answers to these questions in this post.

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Read More: Is Brain Tumor Covered by Health Insurance Plans in India?

What is Health Insurance Premium? Does it change at the time of renewal?

A health insurance premium is a payment made towards a health insurance policy to keep the plan active.  However, one important aspect of health insurance is that it requires regular renewal on a yearly basis.

Talking about the premium, there is a health insurance premium increase that one has to undergo at the time of renewing a plan. Since the healthcare expenses are rising continuously, the insurer of your health policy also needs to enhance the sum insured on yearly basis. And when the sum insured is increased on a yearly basis, the consequent cost of premium also rises at the time of policy renewal.

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Why is there an Increase in Health Insurance Premium Every Year?

For policyholders who are using a health insurance policy for some years now would know about the yearly renewal of policies and the imminent hike in premium. The key aspect of this hike in price is inflation along with other factors like rising cost of healthcare in India.

Further,  with more and more people getting lifestyle related diseases such as diabetes, hypertension etc., the rise in health care premiums is likely. Besides, there are other factors such as age of the policyholder, habits and lifestyle as well as the health condition of the policyholder that determines the premium of a policy.

5 Reasons for Increase in premium of Your Health Insurance year on year

Inflation is the key reason why health insurance premiums get costlier year on year. Below are some of the  top reasons behind your health insurance premium increase:

1. Inflation in Healthcare sector

This is the first reason why health insurance becomes expensive. On one hand, the cost of living in general is getting hiked and on the other hand there is a greater increase in healthcare inflation. All these are unavoidable expenses that enhance the overall cost of health expenses such as cost of medicines, hospitalization, diagnostic, surgery and so on. These costs are getting all the more expensive with each passing year and are beyond anyone’s control. Hence insurers raise the premium of health insurance plans to cover these rising expenses.

2. Age of Policyholder 

With age, the number of diseases and deteriorating health conditions increases. Likewise, the needs of healthcare also increases. Aging is something which is beyond anyone’s control and so do the issues which are caused due to growing age.

Aging is directly proportional to gaining diseases and becoming susceptible to injuries. Thus, health insurance providers find it risky to offer health coverage to aged people. And that is the reason why they increase the premium amount of health policies to allow extra cover to the aged insured individuals. So, healthcare costs for aged people or senior citizens are more expensive.

Aging is an important reason for the increase in health insurance premiums. Hence, it is recommended to buy a health insurance policy when you are young so that you can avail insurance at lower costs.

Also Know: Buying a senior citizen health insurance policy? Look out for these points

3. Coverage Needs

The healthcare requirements tend to change with the change in time as people develop different health issues or complications. People require extra cover to include their spouse or parents or any other dependent. Or they may include certain riders as per their need. They may also like to switch to a family floater plan from a regular individual policy. All these are causes that might lead to change in your coverage, which ultimately will change or increase your health insurance premium.

4. Claim History of Policyholders

There are some insurers who increase the premium of health policies depending on the number of claims made in a year. So, it is necessary to go through the insurance policy papers well before buying the policy to ensure that your insurer doesn’t increase the premium based on the claims made in a year.

Also, if you are experiencing the same with your present insurer, you may port to another one to avail a policy where this clause is not there.

5. Health Condition of Policyholder

The lifestyle and preventive health measures applied by policyholders in their daily life is another deciding reason for your premium amount. There are insurers who consider the overall care and wellbeing that policyholders do about their health.  Things like quitting smoking and other bad habits, staying active, regular exercise, maintaining a balanced weight etc. are taken note of by insurance companies. In return, they award the insured with free health check-ups and discounts at the time of renewing premium.

How to Minimize Health Insurance Premiums?

There are few points to take note of if you want to minimize health insurance premium as mentioned below:

  • Switch your insurance plan to a company which allows renewal bonus or discount. Do a health insurance premium comparison to get better and more suitable plans as per your need
  • Try to avail No Claim Bonus offered by many health insurance companies in India for every claim-free year
  • There are some insurers who also offer good discounts at the time of policy renewal if the insured meet certain fitness goals
  • Also, switch plan to avail health insurance from an insurer who does not increase the premium as per the claims made in a year
  • Purchase health insurance when you are still young. This is because buying a health plan sooner makes it better and easily affordable for the insured

Health insurance premium can be paid on monthly, half-yearly and on an annual basis. Depending on your feasibility of payment, you can pay health insurance monthly premium or quarterly premium to make it easy on your pocket.

Also Read: Health Insurance Renewal – Guide to Online Process

To Sum Up

As discussed above, you now know about the reasons for health insurance premium change at the time of policy renewal. You must understand and compare policies well at the time of buying a health insurance plan or switching to another plan. You can even use a health insurance premium calculator to check the premium to be paid as per health insurance premium chart  for different insurance plans. This way, you can get a fair idea about the premium of health plans that suits you as per your budget and needs.

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FAQs: Does Health Insurance Premium Change on Renewal

Does health insurance premium increase during renewal?

If you talk about health insurance premiums, yes it does increase at the time of renewal each year. This is mainly because of inflation. Since the price of everything increases, so does the cost of healthcare expenses.  

How much do health insurance premiums increase each year?

The increase in the healthcare premium is due to many reasons including inflation, age of insured, change in coverage, change in the health condition of policyholders and so on. Based on all these factors, your insurer will enhance your premium up to a certain amount.

Can we renew health insurance at any time?

You can renew health insurance at the time of policy renewal. However, if you miss the expiry date and cannot renew your policy on the due date, you may renew it during the grace period, which is the additional time given by your insurer to renew your health insurance.  

What can we do to minimize increasing health insurance premiums?

Below are the things that you can do to minimize health insurance premium:

1. Buy a Health Insurance Policy at a young age
2. Avail deductibles and co-pays 
3. Consider buying a Long-Term Health Insurance Policy
4. Choose from a variety of Family Floater Health Insurance Plans
5. Choose coverage as per requirement 

What are the things to consider before renewing a health insurance plan?

1. Assess your health situation
2. Consider the type of policy you want to avail as per the health situation and needs 
3. Consider health insurance portability if you are not happy with your insurer
4. Make an informed choice while renewing your health insurance 

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Dec 26, 2022
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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