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Can the health insurance premium change on renewal? | FAQ #18

Last Updated: Jan 15, 2018 | 7,220 Views
Yes, the premium may change at the time of renewal. Mostly it will be an upward revision in premiums.

The premiums change of health insurance plans may change on renewal due to 2 reasons:
  1. Age-based increase - Health insurance plans are mostly one year plans. And the premiums are based on the age of the members who are being covered. So as age of the members increase, there is a natural increase in the premiums. Companie usually increase the rates for based on age-bands and when you move from one band to another, there is an increase in premium.
  2. Loading in premiums - Companies can no more load on an individual basis. But they can increase premiums for certain set of customers based on the claims experience. So it is possible that your premiums too have increased.
  3. Increase in overall premiums - This happens. Insurance companies can take the approval of the regulator and increase the premiums of the plan. In case they observe that the rates which were first offered to you at the time of taking the plan are not sustainable, they can change the rates after taking the approval of the insurance regulator.
There isn’t much that can be done in case the premiums increase. You may have bought the plan a few years back when the premiums were very aggressive. But after a few years, you may see the premiums increase without even you making a claim. Unfortunately that is how it works in health insurance. Nothing much can be done about it. You can of course use the portability option and move to another plan from another company which is offering better rates now. But if there are claims in your plan, there is chance that the new company of your choice may not accept your application.

If you have any questions on this, please drop a comment and we will be happy to chip in.

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