Health insurance policies have become expensive. After the 2013 regulations, when IRDAI made life-long renewal in health policies compulsory and barred insurers from loading on renewal premium of individuals after a claim, health insurers have revised premium rates.

In some cases, premiums have gone up by 20-25 per cent. While the new regulations are welcome, many policyholders are not able to cope with the higher premium costs

Discontinuing the policy will not be wise. Here are some suggestions to lower your insurance costs:

Port to another insurer
If you do not want to continue with your old policy, you can switch to another insurer. Regulations allow porting or
switching of health insurance policies without loss of the waiting period credit and ‘no claim bonus’.

But note that you have to approach the new insurer with the porting request at least 45 days before your policy expires. If you are unable to do so, ask your existing insurer to cover you for the intermediate period by paying the proportionate premium.

Generally, insurers agree for a three-month extension. In the meanwhile, you can hunt for cheaper policies online.
Health insurance policies have been standardised now. Almost all the policies today have only a 30-day initial waiting period and no sub-limits on claims under charges like room rent or surgeon fees.

So, with more or less the same features, there are more than a dozen health policies available in the market. If you are 35 years old, a Rs, 5 lakh sum insured policy is available for an annual premium of Rs, 4,500 and also for Rs,
10,000.

Most insurers, such as ICICI Lombard and MAX Bupa, which charge higher premiums, have only a two-year waiting
period for pre-existing diseases compared with three-four years for others.

But, if you do not mind waiting for one or two years, you can go for cheaper policies. So, do not discontinue your health policy. You will always have cheaper options in the market, unless you have a poor medical history.

Top ups
If you want a higher insurance coverage but do not want to cough up a substantially higher premium, buying a ‘top up or a ‘super top up’ health plan is the best option.

These plans will cover you, once hospitalization expenses exceed the agreed deductible (or threshold) limit.

The deductible amount can be paid from your pocket or through a regular hospitalization policy. The difference between a ‘top up’ and a ‘super top up’ plan is that the former will pay only if each claim that you make in a year exceeds the threshold limit, while the latter will pay as and when your cumulative outgo exceeds the threshold. The benefit of these plans is that the premium works out far cheaper compared to regular health plans. Take, for instance, a family of three – husband, wife and kid who want a health insurance of Rs. 10 lakh. If this is done through a single hospitalization plan, the premium will be Rs. 15,000 per annum.

But if the family takes a hospitalization plan for Rs. 5 lakh and a super top up plan for Rs. 5 lakh with a Rs. 5 lakh deductible, the total premium will be Rs. 12,171. If they go with a top up plan, the premium will work out even cheaper. Insurers such as New India Assurance, United India Insurance and Religare offer super top up plans.

Look for family floaters
Family floater plans are a good option to save on premium costs, especially if you are a young couple.

Say, suppose you are 35 and your spouse 30, a separate health plan for both of you for sum insured Rs. 5 lakh each will cost about Rs. 10,500. But, given that both of you are young, the full sum insured under the two policies may not be used. So, take a family floater plan for Rs. 5 lakh. This way, you and your spouse can individually or together claim for up to Rs. 5 lakh

For one Rs. 5-lakh family floater, the premium will be Rs. 7,900.

Insurers today, however, offer options to cover a large family under one single cover to end the hassle of servicing
premium requests for multiple policies. Max Bupa, for instance, has an option to include 19 members of a family,
including in-laws, niece and nephew, in a single policy, says Somesh Chandra, Chief Operating Officer, Max Bupa
Health Insurance.

The other advantage of floaters is that if you include your child in the plan, at a later stage when the child moves out of the floater policy on attaining 21/23 years, he/she will get continuity benefits on buying a new policy from the same insurer.

Rajalakshmi Nirmal
This article was published on August 9, 2015, in BusinessLine (The Hindu)