Ever wondered why your health insurance premiums rise during the renewal period? Just like house rent, fuel prices are driven by various factors such as inflation, demand, and supply. Similarly, the healthcare industry comes across different factors that lead to an increase in premium rates. Inflation is one of the primary reasons. Inflation affects more adversely in the healthcare industry more than others. However, there are a few more factors that contribute to the increase in the premium of your health insurance policy. Let’s understand them one by one.
Factors that affect the premiums of health insurance
Let’s
dive deep into each of these factors and see how they affect the premiums of your health insurance policy.
#1 Covid
One of the major factors for the rise of premiums in the health insurance policy is due to Covid-19. Two years back, no insurance company had any provision for such a pandemic situation. Over these years, claim frequency has doubled due to the detection of Covid-19. Considering the medical expenses touching the skies there has been a hike in the premiums of the health insurance plans.
#2 Inflation in the healthcare industry
With the spread of the pandemic globally, there has been an increase in the overall cost of all major resources. An increase in the price has led to inflation and the maximum is being observed in the healthcare industry. There has been a considerable increase in the cost of medicines, hospital admission charges, and so on.
#3 Claim history
In a situation where the policyholder makes multiple claims during the year, some health insurance companies tend to increase the premium of their policy. It is important to review your health insurance policy every year, to understand the reason behind the increase in the premium charged. To check whether your health insurance premium increases on the basis of the number of claims made in particular. Your premium will not increase just on your plan due to a claim being made in the past. It is the health insurance company’s overall claims which may impact future premiums. Also, they may increase rates for a specific category of customers if they have a higher-than-normal claims history.
#4 Change in coverage benefits
Another reason for an increase in the premium of your health insurance policy is the change in the coverage amount. As you renew your policy, you might realize the need for an upgrade in the cover amount, which will lead to an increase in the premium amount. If you decide to add some special benefits like maternity add-on and a few more then also the premium may shoot up.
So, if you decide to do any of these changes to your existing health insurance policy, there will be an increase in the premium amount.
#5 Rising Age
The premium of a health insurance policy is calculated on various factors and your age is one of them. Every insurer has this age bracket clause, where the premium changes after a specified age bracket. This may vary from company to company. Entering into different age brackets will lead to a slight increase in the premiums.
Overview
It is important to review your health insurance policy every year as the premiums might increase due to the above-mentioned factors. Depending on your affordability, any specific requirements, or special features you can either continue with your existing policy or think of porting it to a different insurance provider.
You can visit MyInsuranceClub to compare and buy term insurance policies and other investment plans for your family. Our insurance experts will guide you through making the best choice.
