If the premium of your health insurance policy increases wildly every year, then there is some big relief news for you. Insurance regulator IRDAI is soon preparing to curb the increase in health insurance premiums. Let us know in detail how this step will benefit the common customers and what effect it will have on the insurance companies.
The arbitrariness of insurance companies will be curbed
Currently, insurance companies increase the premiums of health policies every year at their own will. Often, companies keep the premium low in the beginning to attract customers, and then increase it arbitrarily every year. This makes the policy so expensive in a few years that customers have very few options to continue it. To stop this arbitrariness, IRDAI is now considering setting a fixed limit for premium increase every year. This limit will be applicable for the policy as well as the entire portfolio.
The limit has already been fixed for senior citizens
After the COVID-19 epidemic, the premiums of health policies had increased very rapidly. Keeping this in mind, this year, IRDAI has fixed the limit of increase in the premium of health policy of senior citizens at 10%. Its purpose was to protect the elderly from the rising premium rates. However, experts say that insurance companies can compensate for this loss by increasing the premiums of people below 60 years of age.
Health policy has a large share of the premium
Health insurance has a very high share in the total premium collection of the general insurance industry. This share is estimated to be around 40% in the financial year 2024-25. This means that insurance companies are now largely dependent on health policies in terms of revenue. The figures of some big companies clearly show this.
The share of health insurance in the total premium of ICICI Lombard is about 30%, while for New India Insurance, this share is around 50%. Health policies also account for about 14% of the total premium of Go Digit. This clearly shows that health insurance has become a huge market for insurance companies.
Health insurance will get a boost
IRDAI may soon issue a consultation paper on this issue. Experts believe that strict regulations for health insurance prices are very important. This is a very important step to increase the use of health insurance in India. When the premium increases too much, people lose interest in the policy. With stability in the premium, people will be able to continue their policy for a long time without any worry.