Your Health Policy is getting dearer- What should you do?

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Two years of bleeding by the insurance companies due to regular COVID waves have forced them to hike the premium for health insurance policies.  Both general and health insurance companies have received over 2 million claims and in monetary terms, the figure stands at over Rs.30,000 crores. The high magnitude of claims, both in numbers and volume, has given considerable losses to insurance companies. Many companies started increasing their pricing immediately after the 2nd wave settled, however, many have acted now and others will follow the trend soon. It is essential to accept the hike in premium a reality as any unusual rise in claims directly impacts the premium being charged by the insurance company. We have experienced similar action by the life insurance companies as they hiked the premium of term plans twice in two years. The following points must be crossing the minds of many with the renewal approaching and we are sharing the right strategy one should follow.

Port the policy: Many would be considering porting their existing policy with a company offering a lower premium. One starts searching options through an online portal to look for a policy offering a lower premium than their current policy. It might not be wrong to look for available options, but one should study the features before shifting to another Insurance company's health policy. Low premiums might not necessarily give you the right product. Moreover, the low premium products would eventually hike the premium in near future. It is practically impossible to keep switching from one company to another based on pricing, as product features should be an important consideration for deciding on a policy.

Reduce the Sum Assured (SA); with the premium increase, it is evident that those who cannot afford to pay such a premium either would discontinue the policy or reduce the assured sum. Understandably, one has to cut corners to pay a premium beyond the budget; however, it would not be advisable to discontinue the policy. The discontinuation of the policy would mean losing benefits accrued in an old policy and buying a new policy later would mean the cycle of waiting period for various diseases begins afresh. Therefore, one can reduce their SA to bring down the premium and enjoy the benefits of continuity. And one can enhance the SA at the later stage at the next renewal stage only if a healthy condition prevails among the family members.

Top Up plan; the plan has recently gained popularity with a low premium and helps to enhance the coverage amount. Many have experienced the plan's benefits when a family has to deal with any critical disease diagnosed by a family member. It would be advisable to evaluate the total expense package if one wants to reduce the SA and buy a top-up plan instead. This would give you a cost-effective option while it would help you to maintain or improve the SA. It can also be a viable solution for those discontinuing their base plan due to financial constraints as they have their corporate health insurance plan. Opting for the Top-up plan to give them higher cost-effective coverage is advisable.

The situation with health policy is certainly getting tricky with the consumers as they have been witnessing a surge in the premium at regular intervals. Everyone realizes the importance of health policy, but it is becoming unaffordable, especially for senior citizens, where the maximum increase in premiums is witnessed. It is natural for insurance companies to enhance premiums for the age group where higher claims are experienced. The health insurance industry has evolved with the new features and benefits not experienced earlier in the last few years. It has become an important part of the family financial plan; therefore, it would be viable for policyholders to seek the proper guidance from experts to evaluate the best option before taking any decision regarding your health policy.