How my health insurance costs have increased over the years

Published: July 6, 2016 at 6:31 am

Last Updated on December 18, 2021 at 10:32 pm

I have been holding an individual health insurance cover for my family for the last 10 years. In this post, I look at how the insurance premium has increased during this period.

I hold a United India Platinum policy for self, wife and son and a Gold policy for my mother. Each year, I have increased the cover for each member by as much as the insurer would allow.

The cover for me and my wife has doubled from 3L in 2006 to 6L in 2016. For my mom, it has gone up 3.33 times from 1.5L to 5L.

I did not apply my mind much when I got the policy as it was purchased in a hurry when my dad was diagnosed with cancer and none of us has any insurance. During this period, I have made three successful claims: Once for myself, my mom, and my wife. So I am reasonably happy with my rash decision.


Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥

Our premium has increased because of three reasons: because of increase in cover, because of movement into the next age band and possibly because of claim-based loading.

The total annual premium was about 0.5 times (50%) the monthly expenses in 2006 and has now grown to 1.2 to 1.3 times more than monthly expenses in 2016.

Health insurance is a personalised product. So consider the trends mentioned in this post as a rough indication of what to expect with your own policy.

The life insurance space has changed quite a lot in the last 10 years. We now have more options from private players. In Feb. 2014, IRDA mandated no-claim-based loading for health insurance policies. We now have the convenience of portability (at least on paper). And we now have group insurance policies offered by banks, which makes it more affordable.

The premium per lakh considered below is the bare premium before service tax, stamp duty, family discount and no-claim discount.

Amma

Health insurance costs-1

The circle represents the renewal premium when a claim was made in the previous policy. The sharp jump could be due to claim based loading and/or movement into a higher age band (post 65).

The claim arose days before the IRDA announced no claim based loading rules. So I wonder if it is due to loading.

Notice that although the sum insured increased steadily with age, the premium per lakh seems to have decreased for a few years! This seems to be the behaviour within each age band as seen below.

Myself

Health insurance costs-2

The oval represents the renewal after a claim. This was when no no-claim loading was firmly in place. The insurer did not increase the premium, but told me that I cannot increase the sum insured that year!

The sharp increases in premium per lakh at ages 36 and 41 should correspond to my moving into different age bands and hence increased risk of hospitalisation.

Wife
Health insurance costs-3
The claim in her case arose a good 4 years before the no-claim loading rule. Yet there was no loading and premium per lakh came down! I think this is because of the unique cause of her hospitalisation.

Notice here again that the premium per lakh sharply jumps above 35 and comes down a bit within that age band (35-40).

My Son

Health insurance costs-5

I can’t find the policy when he was new-born and 1Y old. Notice how the premium per lakh has dropped sharply. This is because infants and toddlers are high risk for hospitalisation (even with all the vaccinations that we have now).

Overall Increase

Health insurance costs-4

This is the total premium (set as 1 during the start of the policy) and the year on year increase. A value of 1 in 2006 has become 3.5 in 2016.

The overall increase in premium is about 15%!

I think it would be safe to say that regardless of the policy, if the sum insured is increased each year, the premium should at least increase by 10%.

I have been lucky (so far)  not to have received a letter from United stating that the policy with the same sum insured will now cost ~ 100% more!!

In Jan 2016, Swapnil Kendhe posted about discontinuation of no claim discount and an  increase in Oriental Insurance premium due to

Revision on premium is based on new improved features and claim experience of portfolio including medical inflation. However, we as a responsible Insurer value our relationship with you and have tried our best to keep the premium increase to the minimum.

Since then, a search in FB group Asan Ideas for wealth reveals a premium increase of 90%, 100%, 163% ….

Now that is a blow one cannot prepare for! Will portability help in such cases? Can anybody who went through such an increased and shifted their policy comment on this?

In case you are wondering, “why does he not shift to another policy?”. 1) I have a lot of inertia and 2) I cannot even if I wanted to. Both I and my mom have conditions which a new insurer is unlikely to accept! Thank God we got our policy when we were young and healthy!!

Do share this article with your friends using the buttons below.

🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
Follow Freefincal on Google News
Follow Freefincal on Google News
Subscribe to the freefincal Youtube Channel. Subscribe button courtesy: Vecteezy.
Subscribe to the freefincal Youtube Channel.
Follow freefincal on WhatsApp Channel
Follow freefincal on WhatsApp
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth! 
Listen to the Lets Get Rich with Pattu Podcast
Listen to the Let's Get Rich with Pattu Podcast
You can watch podcast episodes on the OfSpin Media Friends YouTube Channel.
Lets Get RICH With PATTU podcast on YouTube
Let's Get RICH With PATTU podcast on YouTube.

  • Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
  • Have a question? Subscribe to our newsletter with the form below.
  • Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!

Explore the site! Search among our 2000+ articles for information and insight!

About The Author

Pattabiraman editor freefincalDr. M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter, Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course!  Increase your income by getting people to pay for your skills! More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts you and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   
Our new book for kids: “Chinchu gets a superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both the boy and girl version covers of Chinchu gets a superpower.
Most investor problems can be traced to a lack of informed decision-making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it and teach him several key ideas of decision-making and money management is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & it's content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)