Family plan health insurance schemes have been rising in prominence among Indian families as an important tool to have financial cover over the last few years as the cost of healthcare has been increasing. Nevertheless the premiums have shot by as high as 18 percent in the previous year owing to a sudden increase in claims. This increase is an indicator of the general medical inflation, prevalence of hospitalisation and evolving lifestyle diseases. Personal accident insurance is also becoming a popular complementary insurance alongside the health insurance particularly to families who want to be fully covered against such unplanned incidences. This paper will discuss what causes premium increases, how this affects families, and how to maximise the benefits of insurance in the present climate.
Increased claims and premium increases in family based health insurance.
The rising trend of health insurance for family coverage can be largely due to a rapid rise in claims. The current reports released by Insurance Regulatory and Development Authority of India (IRDAI) claim that the claim ratios of the health insurers have increased to about 85 percent as compared with 75 percent during the past financial year. This tendency has been caused by a number of factors:
– Higher rates of hospitalization, especially of chronic, lifestyle illnesses such as diabetes, heart diseases and respiratory illnesses.
– Inflation of medical care expenses, such as surgical operations, diagnostic tests, and the day care procedures.
– Increase in health services usage because of increased health awareness in the wake of the pandemic.
Increase in fraud cases and excess use of healthcare centres.
With higher claims, the insurers have to remain solvent and profitable and this may be achieved by raising the premiums and this has resulted in a general average increase of 15-18% in family health insurance plans. This has a lot of effects to middle-class families who review their insurance budgets.
Factors that affect health insurance rates in India.
Premiums on health insurance in India are set on different basis, particularly when the family floater plans are taken by more than one person under the same policy sum insured.
Age of family members
The premium rates are heavily dependent on the age profile of insured members. The aged family members usually receive higher premiums because of the threat of health complications.
Sum insured and general type of coverage.
Increased amounts of sum insured attract higher premiums. Moreover, the plans that have wider coverage such as maternity, pre-existing conditions and daycare procedures would be more expensive.
Claim experience, medical history.
The history of past claims and revealed medical histories come in handy. Families that have a high claims or families with underlying health problems may incur higher premium increases.
Lifestyle factors
The use of tobacco, alcohol and lack of physical activities can contribute to risk categorisation that attracts premium hikes.
Location hospitals and network hospitals.
The high medical cost in urban centres can increase premium cost. Plans that offer coverage over large networks of hospitals normally charge more to gain more convenience and cover.
Effect of an increase in the premiums on families and controlling measures.
The increased premiums will place financial strains on the families and some will underwrite or even postpone important renewals. In order to reduce the effect, the following methods can be implemented by families:
– Review coverage should be done yearly: review medical needs and increase the sum insured as required.
– Use no-claim bonuses and family floater: This offers benefits of cost and enhanced usage of premium outlay.
– Raise deductibles: Higher deductibles will scale down the premium burdens, but must correspond with the risk that the family takes in it.
– Have clear medical histories: Do not have claims rejected by being very clear when doing underwriting.
Also, it is possible to examine allied covers like personal accident insurance to provide an additional coverage. This insurance, which is structured to take care of accidental injury, disability or death, helps families with the finances other than those related to health.
Personal accident insurance and family health insurance purpose.
Personal accident insurance covers accidents that result in disability and death of the accidents. Where health insurance is mainly used to cover hospitalisation as well as medical costs, personal accident insurance will extend the financial cover to include loss of income, and other liability costs of an accident.
Advantages of personal accident insurance.
– Accidental mortality and long-term disability insurance.
– Lump sum payments of temporary disability that cripples earning ability of the insured.
– It is frequently cheap and the premiums are much lower than in health insurance.
– Allows enhancing family health insurance plans to establish full coverage.
Personal accident insurance is also a wise move considering that accidents involving urbanisation and traffic congestion have been on the increase in India. Families are able to protect themselves against unexpected situations not covered by the normal health insurance covers.
Market and regulatory prospects of health insurance premiums.
The IRDAI has also been aggressive in promoting transparency in the process of premium revisions in case of increased claims. The annual reports of justification of premiums should be submitted by insurers. Although this regulatory control is in place to ensure the regulation of insurer solvency as well as protection of the customer, dynamic medical inflation is still going on contributing to increment in premiums.
Health insurance Market competition among the leading insurers is projected to bring new health insurance of family products that have flexible health insurance benefits and wellness incentives. Personalised pricing will also be possible through digital platforms and data analytics to curb the unwarranted cost increases.
To make the right choice whenever renewing or buying a health insurance plan, consumers will have to keep up with the policies changes, claim settlement ratio, and product characteristics.
Health insurance family plan optimisation in the contemporary context.
Indian families operating in the premium increases and claims rising environment need to take a strategic approach in order to sail through:
- Take all health check-ups prior to renewing the policies so that pre-existing conditions can be detected at an early stage.
- Think about family floater policies which maximise premium cost on multiple members as opposed to single cover.
- Use the wellness benefit riders and disease management programmes provided by the insurance companies to minimize health risks.
- A personal accident insurance should be combined with health insurance of family in order to get a holistic protection.
- Periodically audit the performance of insurers in claims settlements and use providers with good reputation.
Conclusion
Family health plans are also a key instrument to support Indian families against the rising healthcare expenses. The recent increase of premiums by 18 percent is a direct product of the soaring claims and medical inflation. In conjunction with this, the personal accident insurance provides effective complementary coverage against risks of financial damages caused by accidents. These insurance solutions together help families to develop strong safety nets. Being aware of the policy available options, health, and appropriate mixed coverage are some of the strategies to deal with the increased costs without reducing the cover. With the changing health insurance environment, wise planning will enable the families to protect their health and financial status efficiently.
