10 ways to cut your Health Insurance premium 

10 ways to cut your Health Insurance premium
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Since these reasons seem out of your control, does it mean the cost of your health insurance will continue to rise during your lifetime? While you may not be able to curb the surging cost, there are various smart strategies, options and discounts, which if availed of, can lower the premium significantly. “A good long-term strategy is, of course, to buy insurance early because at that stage there is little possibility of developing a health condition and subsequent loading,” says Mayank Bathwal, CEO at Aditya Birla Health Insurance. This means that you will not only serve out the waiting period for pre-existing diseases by the time you actually contract an illness, but also gain loyalty and no-claim bonuses, reducing your premium costs significantly.

Combine basic health plan with top-up and super top-up options

One of the best strategies to cut premium is to combine your basic indemnity plan with a booster plan. “If you have a basic plan, but want to upgrade to higher coverage, it can be very expensive to buy another basic plan. A good option is to go for a combination of basic and booster plans,” says Prasun Sikdar, MD & CEO, ManipalCigna Health Insurance.

What this means is that after you exhaust your basic plan, the top-up plan will come into force. More importantly, the price difference will be substantial. For instance. if you have an existing plan of35lakh, which cost 6,621, buying another Rs. 5lakh plan will cost a total of 13,242. If, however, you go for a top-up, it will cost you only 79,156. A super top-up will be slightly more expensive, but will still cost less than the price of two basic plans.

Use co-pay & deductible options in Health Insurance

Most insurers these days offer the options of co-pay and deductible, both in-built and voluntary, to customers. It is a way for insurers to cover their risks, and for customers to bring down their premiums. The co-pay usually ranges from 10-30% of the claim amount. What this means is that if you pick a plan with co-pay, you will pay a percentage of the claim from your own pocket, while the remaining amount will be paid by the insurer. What it also means is that it will bring down your premium. For instance, the annual premium for a 25 lakh plan from Care Health Insurance for a 30-year-old is 7,283, while the premium for another one of its plans with a 20% co-pay is Rs.6,548 a difference of 735.

Use wellness incentives

With insurers going big on promoting wellness and good health, various incentives, discounts and rewards are being rolled out for customers, some of which can bring down your premium significantly at renewal. For instance, under the ReAssure plan by Max Bupa Health Insurance, the Live Healthy Benefit offers renewal premium discount of up to 30% depending on the average number of steps you take on a daily basis. This can be done by downloading the insurer’s health app and collecting health points, which in turn are linked to the daily steps aimed at keeping the customer healthy. “Besides these, there are the pharmacy discounts, free consultations and health check-ups, all of which offer not just a high value proposition but a combined discount of up to 40%,” says Mishra.

Aditya Birla Health Insurance has gone a step further by offering up to 100% return of premium linking it to good health. “If you are actively involved in your health management, you can get the entire premium back, an effective way to reduce your cost,” says Bathwal. As per its Active Dayz concept, if you take 10,000 steps or burn 300 calories or go to a gym for 30 minutes daily, and accumulate Health Returns, you can redeem these against the premium on next renewal.

Take family discount, but don’t include parents

Most insurers offer discounts rang. ing from 5-15% for insuring more than two family members in the same individual policy for a fixed sum in sured. Also known as family floater health plans, these are a good option to cut down your insurance premium. “Enrolling more family members helps the insurer cut administrative costs and pass on the incentives to the customer, who can avoid anti-selection,” says Ved of Tata AIG General insurance

While such policies are cost-effective in covering a nuclear family comprising two adults and children, it may not be a good idea to cover grandparents in the same policy. This is because the premium in a family floater plan is decided on the basis of the oldest member’s age, and including grandparents will shoot up the premium (see table). Among the best ways to insure your parents is to either buy individual policies for both of them, or a separate family floater plan for the couple before they turn 50. Even if you buy two separate family floater plans for yourself and your spouse, as well as for your parents, the premium will be lesser than if you were to buy a combined family floater for the four adults.

Avail of no-claim, cumulative discounts

Most insurers offer monetary incentives at the time of renewal of policy, which can reduce your premium significantly. These rewards are of two types: cumulative bonus and discounts in premium.The first and most common among these is the no-claim bonus or discounted premium, which is the reward you get at the time of renewal for not making a claim in the previous year.

While this discount usually ranges from 20-50%, of late insurers are upping the ante by offering higher discounts. For instance, Future General India Insurance provides an 80% discount on the annual applicable premium if you don’t make any claim in the first couple of years of your plan term. It is available in two variants: Health Super Saver 1X and 2X plans. You get an 80% discount in the consecutive year if your first year is claim-free in the first variant, and same discount for next two consecutive years if your first two years are claim-free in the second one.

Multi-year discounts (with tax advantage)

If you are willing to pay an upfront premium for two or three years at one go, you can earn yourself a discount that ranges from 7.5-15%. As opposed to the payment of annual premium that is the norm, the multi-year premium can be a good option if you are happy with your insurer and plan to continue for the long term.

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Avail of a range of other discounts

While some discounts and options are easily available across insurers, there are others that only some players offer. If you choose carefully, you could pick the one that can add up your discounts.

  1. Online or worksite: As the name suggests, you get a discount if you purchase a policy through an online marketing channel, be it an aggregator like Policybazaar and Policyx, or an insurance broker like Coverfox and SecureNow, or the website directly. You can earn a discount of 5-10% through the lifetime of the policy due to lower administrative and distributive costs.
  2. E-mandate: If you automate your policy renewal such that the premium is received through NACH (national automated clearing house) or via standing instructions for payment through debit or credit card, you can get a 2-3% discount on premium.
  3. Loyalty: While most insurers offer no-claim bonuses, only ManipalCigna offers a loyalty discount. If you stay with the company for three years, then from fourth to seventh year you get a 5% dis-count, and from 8th year onwards you get a 10% discount.
  4. Women: A few insurers like NewIndia Assurance and Reliance General Insurance offer gender-based discounts on premium. For instance New India Asha Kiran policy offers a 50% discount for girl children, while Reliance Health Gain policy offers a 5% discount to girl children or independent women.
  5. Zones: As per the zone-based clas-sification, you get a discounted rate depending on the zone you live in, with a reduction in premium for tier 2 or 3 city. While the classification differs from insurer to insurer, you typically get a 10-20% discount.

Select plans with select sub-limits

If is advisable to go through the sub. limits in a plan so that you know how much you are likely to end up paying from your pocket and avoid these as far as possible. However, on the plus side, sub-limits on various treatments can also help reduce the premium cost. “If you don’t need a full-blown cover and there are sub-limits for, say, cataract, which you may not require, you should opt for sub limits because these help bring down the pre-mium,” says Datta of ICICI Lombard.

Buy group plans, but have an independent plan too

Another way to avail of a highly subsidised premium is to opt for group insurance plans. These are typically available either from your employer or corporates; PSU banks that have tie-ups with insurers; and community-or profession-specific plans. “These are 20-30% cheaper than retail plans, but may not be sustainable over the long term,” says Chabra.

Agrees Bathwal of Aditya Birla Health Insurance: “Group products are good because spreading the cost over a larger number of people brings down the cost. However, if you are not a part of the group or association for any reason at a later stage, and you develop a medical condition, it will become difficult for you to get a cover.

find here : insurance basics.

Shift to a better, cheaper health plan

Last, but not least, you can cut your premium by shifting insurers, when needed. At a given point in time, you may have made a smart choice in selecting your insurer, but if, after a few years, you feel that the premium is disproportionate to the services offered, or that newer products in the market are providing better options at a lower price, do not shrink from migrating to a different insurer. At the time of renewal, compare other policies and decide whether you want to continue with the same insurer or shift to a better one.

“It’s a very practical and easy option to reduce your premium significantly, but one that very few people currently use.

The fact is that health insurance products evolve very rapidly,” says Chabra. So the room rent capping offered by every insurer till only five years ago is no longer available in the new plans. This is because for a plan of 5 lakh, the sub-limit of 1% or 5,000 is no longer feasible as the rates have shot up and customers end up paying most of the money from their own pockets. 

FAQ’s

Is it possible to control rising health insurance costs?

While you may not control all aspects of rising health insurance costs, implementing smart strategies, utilizing discounts, and making informed choices can significantly reduce your premium expenses over time.

Are there any standardized health insurance products that can help reduce costs?

Yes, standardized health insurance products like Arogya Sanjeevani offer cost-effective options, allowing you to start with lower coverage and gradually increase it, which can help reduce your premium expenses.

What is the benefit of combining a basic health plan with a top-up or super top-up plan?

Combining basic and booster plans provides additional coverage after your basic plan is exhausted, at a substantially lower cost compared to buying another basic plan. This strategy can save you money.

What is a family discount, and why should grandparents be excluded from family floater plans?

Family discounts are offered for insuring multiple family members in the same policy. However, it’s advisable to exclude grandparents because their age can significantly increase the premium, and it’s often more cost-effective to insure them separately.

How can I take advantage of no-claim and cumulative discounts to reduce my premium?

No-claim bonuses and cumulative discounts are typically offered by insurers as rewards for not making claims. These can lead to significant premium reductions at the time of policy renewal, encouraging policyholders to maintain good health and minimize claims.

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