Health insurance policy premiums may be indicated while introducing new medical insurance products in India – Health Insurance News – However, there could be an increase in the premium amount for health insurance policy at the time of renewal based on cost of healthcare, medical inflation and the underwriting practice.

JF Jawadwala, Executive Director, Nandi Broking and Risk Management Services said “The health insurer can increase the premium every year at the time of renewal, but these hikes cannot exceed the amount mentioned in the premium chart.” He also went on to add, “There is no formal, written communication from the IRDA regarding raising renewal premiums. However, the regulator is advising companies to furnish a five-year renewal premium chart while filing new products, which spells out the quantum of premium hikes policy holders will see during the period.”

It has been commonly observed that when a person renews their medical insurance India policy, most companies indulge in the practice of ‘loading’ of premium. This is based on the previous claims made by the policy holder. When speaking at an industry conference earlier this month the IRDA chief J Hari Narayan said, “We have seen that if a party makes a claim in a given year, it is likely that the insurance company may increase the premium because you have made a claim. To some extent, it means they are doing underwriting at the time of the claim. And that is not the way you do underwriting. That is what we are bringing in draft regulations.”

The premium amount of health insurance policy will not be allowed to increase for a year’s time when it has been cleared by IRDA as per the draft exposure guidelines. An insurance company must produce three years claims experience on the original pricing, expected experience as well as the reasoning. For the benefit of the policy holders, the new recommendation of the IRDA states that a renewal premium can be increased only if there has been a five year chart provided previously. Also, this would be applicable for the first five years from the launch date of that new product.

So, if the buyer wants maximum benefit they should buy medical insurance India plans for those five years as there would not be any drastic change in premium amounts while providing good health coverage.

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