Lock Your Health Insurance Premiums - With This Innovative Feature!

Health insurance is, in the simplest sense, a contract between you and the insurance provider. The insurance provider covers your medical bills. In exchange, you pay premiums, usually on a yearly basis.

But, did you know that your health insurance premiums rise as you grow old? For example, if you start by paying say Rs 15K when you buy insurance at the age of  30 years, when you grow to say 36, your premiums may increase to say Rs 25K. This goes on. Many insurers have price bands for different age groups like say 26-30, 31-40 and so on. Many increase premiums on every renewal too.  Most of us feel annoyed when we see premiums hikes during renewal, despite not making claims for like years. 

Case in point: 

 But…what if an insurer has solved this?

An insurer has recently launched a new product with an innovative benefit.  It  ‘locks in’ your age and associated premium till you don’t make a claim. Yes! Let’s see how it works - in this article! 👇

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The biggest concern many have with health insurance is that insurance premiums are not fixed like term insurance. What you pay today to get into the plan, is not what you pay as you age. 

Niva Bupa recently came up with a product that solved just that. With this benefit, the insurer promises to fix the premium as per your entry age when you buy the policy, till you do not make a claim. 

So say, you are 29 and you apply for a new policy and the premium is Rs. 15K. Now in the regular scenario, with age, usually the premium increases. Say in the regular case, at age 30 your premium would be increased to Rs. 16.5K. 

Now with the lock the clock feature, your premium is locked to 15K and revised to your age-based premium only when you make a claim. 

So say, if you don’t make a claim till you reach age 50, the insurer promises that your premium will remain at 15K till then. From the year after you make the claim, your premium will get unlocked and charged based on your age (like any other policy).

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This feature comes with certain conditions that you need to pay heed to - 

1️⃣ The insurer may revise the premium chart itself, which may cause changes in the predetermined age-wise premiums. The latest premium amount will be charged in such a case. 

For instance, say you are 30 years old and buy a new health insurance plan with a premium of Rs 15K. With the lock the clock feature, your premium will be fixed, based on your entry age, at Rs 15K till the time you make a claim. But, if your insurer changes the annual premiums for a 30-year-old from Rs 15K to Rs 18K, then you will have to pay the latest premium (i.e. 18K) - even if you don’t make a claim.

2️⃣ The fixed premium does not include GST. If GST rates increase, your total premium will change accordingly. 

3️⃣ If your policy is multi-individual, only the people who file a claim will have their premiums ‘unlocked’ as per their age, like any other policy. A multi-individual policy is a type of health insurance in which you and your family members can get coverage under one single plan but with a separate sum insured for each member.

For example, Raj bought a multi-individual policy for himself and his spouse. The premium is fixed, based on the entry age, at Rs 10K for each person. His spouse needs to undergo surgery, for which they make a claim. Their premium will increase at the next renewal as per their age, while Raj’s premium will remain the same. 

4️⃣ In case you choose a floater policy and a claim is filed, the premium will unlock for everyone covered under the policy. A family floater is a type of health insurance plan that covers your entire family under a single plan. The sum insured ‘floats’ among all members.

Taking Raj’s example again. Let’s say he bought a family floater for himself and his spouse, the premium of which is fixed, based on entry age, at Rs 20K. His spouse needs to undergo surgery, for which they make a claim. In this case, the premium will change and be determined according to the eldest member’s age.

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Your claim will be considered if it is made for - 

• Any expenses you’ve incurred in reaching a hospital.
• Hospitalisation expenses.
• Any expenses that may arise before or after hospitalisation.
• Home care or domiciliary treatments - that are carried out at home under medical supervision in cases where you are gravely unwell or injured and cannot be moved to a hospital, or because no beds are available in hospitals in your vicinity.
• Organ donor expenses.

Once you make a claim, the premium will ‘unclock’ - which means your policy premium will be determined as per your present age and will continue to change as per the age slab you belong to at each renewal. 

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While these latest features may seem useful and shiny, you must keep a sharp eye on what you really need from your health insurance plan. Here are a few things to keep in mind before you opt for extra features -

• Premium Hikes by Insurers
  Premium rates can vary significantly and are often subject to change. When insurers determine that existing products are not financially feasible, they can raise premiums. This applies to all customers who have purchased this product, not just to the customer who has made a claim. 
  
  In the past, insurers had to go to IRDAI to make any changes to premiums. However, as per recent guidelines, IRDAI has allowed insurers to self-regulate product changes, including premium variations. So, insurers can increase the premiums after obtaining the internal product committee's approval.
  
  Another thing to think about is that, without these benefits, insurers have hiked premiums by a whopping 15-30% over the last few years! You never can expect what premium changes will happen for products with such innovative features in the future.
  
   
• Changes or Withdrawal of Products/Features by Insurers
  The insurer can withdraw a product or a product feature at any time based on its internal product policies and approval from internal product committees, by simply notifying the IRDAI. Insurers may only need to prove that their current terms and pricing are not sufficient to overcome the losses they are facing. So, please note that the benefits and features may be removed along with the product you bought. You may even be migrated to another policy where such a feature may not exist.
  
  In our opinion, when you decide to invest in health insurance, you should focus on its core coverage like the sum insured and low/no financial limits like room rent limit, sub-limits on specific treatments, modern, treatments, etc. Treat the additional benefits and features as additional perks and understand how they can impact future premiums. 

Want to make the right decision about your health insurance purchase? Check out Beshak Health Insurance Decoder - to understand the various health insurance plans in the market - the benefits they offer, the limits, exclusions, hidden conditions, and more.

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