Everyone has learned from the pandemic how precious life is, whether it be their own or a family member’s. A sudden health emergency created the need to take safety measures in the market. This is also why health insurance has become a specific need that millions rely on to protect themselves.
However, for many policyholders, the annual renewal premium of a health care policy often comes as a surprise. This further raises the question of why the premium for the same coverage increased over the last year. Read the article below to learn about the same.
Top 8 Reasons for the Increase in the Premium During Renewal
Having the best health insurance policy is a vital safety net that people rely on to stay away from the financial burden of unexpected medical expenses. However, most medical premiums increase each year due to the following reasons:
1. Age of the Policyholder
Your age can significantly impact your renewal insurance premium. Insurance companies consider a policyholder at lower risk when they are younger. With increasing age, a person experiences more health issues and requires medical care, leading to a higher healthcare insurance premium.
2. Medical Inflation
Medical inflation also exerts a significant influence on healthcare planning factors. The constant development of new medical technologies and treatments can be a reason for insurance providers to adjust premiums to maintain financial stability. Moreover, many healthcare policies cover preventive and wellness services, such as vaccination, screenings, and wellness programmes. This may affect the high rise in premiums.
3. Chronic Health Conditions
Another element driving up healthcare expenditures is the incidence of chronic health disorders. Chronic illnesses like diabetes, heart disease, arthritis, and cancer require advanced medical care and treatment. Therefore, depending on the risk associated with the policyholder’s disease, the insurers raise the premium.
4. Claim History
A policyholder’s claim history plays a vital role in determining healthcare planning costs. Insurance providers closely check an individual’s past claims. If you claim serious treatment, it signals a higher health risk for future costs. This also depends on the insurer; some may offer ‘claim-free’ discount rates to policyholders.
5. Customise the Policy
Customising a health coverage plan allows individuals to get extra benefits for their unique needs. It is the most effective way to get the desired benefits for long-term health. However, this can also directly impact premium hikes. For instance, adding maternity coverage to surgery treatment will increase premiums to reflect the additional benefits provided.
General inflation affects almost every aspect of our lives, including healthcare costs. Therefore, the prices of medical services, medications, and equipment naturally rise over time. So, insurance companies increase premium hikes over time to ensure that the coverage remains adequate.
7. Administrative Costs
Running an insurance company is a complex and multifaceted operation. It involves various administrative tasks such as claims processing, customer service, sales and marketing efforts. Therefore, taking care of all of this comes with its own associated costs.
So, to remain financially viable to provide timely and effective services, insurance companies factor these administrative expenses into their premium calculations. This, in turn, impacts the premiums policyholders pay.
8. Government Policies
Government regulations wield significant influence over the healthcare industry, including health policy premiums. For instance, tax changes and coverage expansion regulations can affect insurance costs.
This can increase the overall financial commitments of insurers. Therefore, to cope with such changes, insurance companies increase the price of their policy premiums.
Although healthcare insurance premium increases during renewal can be frustrating, they are often the result of complex factors that insurance companies must deal with. Thus, understanding these reasons can help you make informed decisions about your healthcare plan coverage. It is also essential to periodically review your policy, assess your needs, and compare different insurance providers to ensure you get one of the best health insurance plans.
In case you are looking for reliable healthcare coverage. Then, consider exploring options with Niva Bupa best health insurance company in india. They are known for offering some of the best health insurance plans in India. Moreover, they have designed their healthcare policies to be customised per their customers’ requirements.
So, choose Niva Bupa for ideal healthcare plans!