Health insurance: Policy premium goes up 73% since 2020, total insurance sum assured up 240% 

The health insurance sector in India is experiencing significant expansion, fueled by escalating healthcare expenses and growing consumer knowledge following the COVID-19 outbreak. With a yearly medical inflation rate of 14%, the health insurance market is forecasted to surpass Rs 2.0 lakh crore (USD 23.8 billion) by 2028, as per GlobalData analysis.

A recent report from insurtech platform Turtlemint has revealed a remarkable 240% growth in the total sum assured over the last five years. This growth signifies a notable shift in consumer behavior towards more comprehensive health insurance plans. The increase comes at a time when India is facing escalating medical inflation, currently standing at an annual rate of 14%, and in a post-COVID era where the necessity of financial preparedness for health emergencies has become increasingly apparent.

The COVID-19 pandemic served as a wake-up call for many Indians, underscoring the risks associated with inadequate health coverage. As the nation moves towards recovery, the repercussions of the pandemic are still visible in the escalation of health insurance premiums and policy sales, particularly in smaller cities where awareness is on the rise. Notably, the premium per policy in Tier 2 and Tier 3 cities has seen a remarkable 73% increase since 2020, demonstrating consumers' growing willingness to invest in more extensive health coverage. 
 
"The increasing preference for higher sum assured and comprehensive coverage highlights a growing consumer focus on financial preparedness for medical expenses," said Dhirendra Mahyavanshi, Co-founder & CEO of Turtlemint.
 
According to GlobalData, the health insurance market is expected to reach Rs 2 lakh crore ($23.8 billion) by 2028, with medical inflation currently at 14%. Discussions are ongoing in Delhi to potentially implement a 10-15% increase in health insurance premiums to account for the impact of air pollution on policy costs. If approved by Irdai, this would be the first time in India that air pollution is directly factored into health insurance pricing, potentially setting a precedent for other cities facing similar air quality challenges.
 
IRDAI’s new health insurance premium rules

The Insurance Regulatory and Development Authority of India (IRDAI) has recently implemented regulations aimed at safeguarding senior citizens from excessive increases in health insurance premiums.

Under the new guidelines, insurance companies are restricted from raising health insurance rates for senior citizens by more than 10% annually. Any proposed premium hikes beyond this limit require approval from IRDAI.

Additionally, insurers are not allowed to discontinue individual health insurance plans tailored for senior citizens.

IRDAI has recommended that insurers adopt a unified empanelment of hospitals to establish standardized hospitalization packages and reduce expenses.

Senior citizens frequently encounter significant increases in premiums, sometimes reaching as high as 50-100%. These spikes render health insurance increasingly unattainable and jeopardize their access to healthcare.

The recent measures taken by the IRDAI not only promote consistency in premium rates but also enhance transparency and cultivate trust between policyholders and insurers.