How to Beat Rising Health Insurance Premiums?
Rising inflation and the covid pandemic have significantly impacted hospitalisation costs. This has, in turn, also affected the cost of health insurance. For an ordinary salaried person managing an extended family, one is often left tearing one’s hair apart, wondering how to pay the premiums.
Consider these factors to reduce your premium.
Buy Your Insurance Early in Life
The older your entry age to a health insurance plan, the higher the premium. In addition, the chances of hospitalisation when you are younger are far less, which allows the No Claim Bonus (NCB) clause to kick in. If a policyholder hasn't raised a claim during a policy year, the insurer may provide them an additional 5% to 10% coverage the following year at no extra cost. Often, this coverage is guaranteed up to 50% of the basic sum insured. Other insurers may offer you a discount on the premium if you do not make a claim. So, compare health insurance policies from different companies and opt for the one with this benefit.
If you buy health insurance in your 20s and there are few chances of developing a complication, you could also avoid the load factor. Most importantly, most health insurance plans come with a waiting period — a period of time frame before you can make any claim against hospitalisation expenses, except in the case of accidents. This period varies from 7 days to six months or more from the policy commencement, depending on the plan. If you buy the policy early, you will have already served the waiting period in health insurance before you are likely to need it. When purchasing the health insurance policy, this period can extend to as many as four years if you have a pre-existing disease.
Buy a Top-up Plan
Many insurance companies provide top-up or booster plans. This can drastically reduce the premium amount. If you want to double this coverage under the existing plan, it would generally result in a doubling of cost or more. However, you could purchase a top-up plan from your primary medical insurance provider; if you purchase it from another company, you may get it at half the additional cost or less. Note that you can claim the top-up only when you have exhausted the original basic plan. Another advantage to the top-up plan is that, in most cases, you can use it to supplement the capped room rent and procedure rates and other expenses not covered by the basic plan.
Purchase a Family Floater Plan
Family floater health insurance covers two or more family members under the same policy, which could reduce the premiums by up to 15% or more. In today’s competitive insurance market, many service providers will also offer to reset the insured amount to 100% of the base sum in case any of the members covered under the policy have exhausted the base amount. However, use a health insurance premium calculator to check the total premium and insured amounts. Sometimes, if people over 40 need to be covered, the family floater plan may not be the best fit for them.
Look for Discounts
There are several discounts available on insurance health premiums. Some offer a special discount to women. In a family floater plan, the discount percentage may depend on the number of women enrolled. Most service providers will offer a discount for cumulative purchase, i.e. if you offer to buy a two or three-year policy, discounts could range from 5% to 15% for each successive year covered.
Some insurers provide health insurance benefits by tying up with pathology centres and treatment facilities to offer discounts on various treatment and pathological examinations that your policy may not cover. Since most insurers only allow claims against hospitalisation, this is a valuable discount to look for.
Some providers also offer discounts based on lifestyle and health parameters. Depending on your exercise routine and the number of calories you burn — should they fall within the stipulated limits, the discounts promised are as much as 30% of the premium. If you wonder why insurers do this, it’s because an intelligent way to reduce the risk of hospitalisation is to encourage you to maintain a healthy lifestyle! Others may map your health parameters between two successive check-ups. If there is an improvement, they may offer you a discount on the following year’s premium. Still, others may provide vouchers for redemption at pharmacies or health centres.
All medical insurance service providers do not offer the same discounts. So, check which service provider offers you the plan that suits your needs and the maximum number of deals.
Tax Deduction Helps Save Money
You will benefit from tax deductions under Section 80D of the Income Tax Act, 1961. Depending on your sum insured, premium and age, you could save up to INR 1 lakh in taxes, which can help you pay for the premium amount at the time of health insurance renewal.
Now that you know how to reduce your health insurance premium and better cope with the rising health expenditure, you may wonder if your current health insurance provider is giving you the best deal. If you think you could get better coverage at a far more reasonable price, do not hesitate to try health insurance portability and get a policy with low premium and higher coverage.
Load factor is an additional amount you may have to pay if you have a higher risk of hospitalisation or illness. Age, being detected with diabetes, high blood pressure and other conditions are among some of the risky conditions.
Suppose you have a medical condition, ailment or injury that had no signs and symptoms or was diagnosed within 48 months of your policy issuance and renewal continuously after that. In that case, IRDAI terms it as a pre-existing condition.
Suppose you have an insurance cover of INR 5 lakh and have made a claim against this during the year; many insurers offer to reset or restore the sum insured up to 100% of the base sum, i.e. INR 5 Lakhs in this case, against which you could make a second claim in the same year.
Switching the policy from one insurer to another is known as porting. Most accrued benefits are protected and transferred to the new policy when you port your policy. Ensure that the new provider is offering to port your policy and not sell you a new one. In many cases, the sum insured under the new plan cannot be more than the amount in your old one.
India’s insurance regulatory authority safeguards you when porting to another plan. If you have already served the standard waiting period with the previous insurance provider, there usually is no waiting period in the new policy.