9 tips to cut your health insurance premium outgo

In the current scheme of things, when medical inflation is on the rise, a doctor visit to get a diagnosis for small illnesses, like cold and cough, can burn a hole in the pocket of an average Indian. The situation becomes worse in case of critical ailments related to heart and kidney. As a result, healthcare costs have also increased in different states as seen in the below image.

Source: Livemint.com

To combat this exorbitant medical cost, it is advised to buy a health insurance policy. However, the insurance helps you only if it is adequate. As per the study conducted by BigDecisions.com, the extent of underinsurance is around 60-62% among people in the age group of 25-35 years. It is high in the 45+ age group, where it is around 69%.

The number of policies renewed has also fallen drastically. As per Insurance Regulatory and Development Authority of India (IRDAI), only 74.79 lakh policies were actually renewed as against 92.67 lakh policies during 2014-15. In some cases, it is due to high premium rates that compel people to stay away from health policies. If your limited budget is affecting your decision of buying a health cover, here are some tips that can help you to get a health policy at low rates without reducing the coverage.

1. Buy mediclaim policy when you are young: There are various factors which decide premium rates of a health insurance policy, and age is one of them. If a policyholder moves to a high age band, renewal premiums get increased. Though, there is nothing that can be done to avert such hikes, but if you are yet to sign up for a health insurance policy, you should buy it as soon as possible. With the increasing age, the chances of health risks also rise and so do your health insurance premiums. Therefore, it is always best to purchase your health insurance policy when you are young.
2. Choose a medical insurance policy that doesn’t consider previous claims: There are various insurers which increase premium rates if a policyholder has made a claim in previous years. Therefore, you should go for a policy where the burden of previous claims is less to trim your premium rates.
3. Opt for family floater policies: If you are thinking to buy health policies for the entire family, it is good to go for a family floater health policy. In case of family floater health insurance plans in India, the overall cost is divided among insured members. As a result, premiums are low as compared to individual health plans.
4. Go for a high deductible: The deductible clause refers to the particular amount up to which the insured is not covered under the policy. Policyholders can opt for a higher voluntary deductible to lower their premium rates. As said by Amit Bhandari, Vice-President, Health Underwriting and Claims, ICICI Lombard, "The main aim behind such plans is for bigger claims to be paid by the insurer. Based on their paying capacity, policyholders pay smaller claims from their pocket, thus cutting the insurer's and their own cost." At the time of claim settlement, this part has to be paid by the policyholder before the insurer steps in and pays the remaining balance. In this way, the insurer reduces the yearly premiums, depending upon the terms and conditions of the policy.
5. Use the benefit of co-payments: Under a co-payment, a fixed percentage of the claim amount has to be borne by the insured. After which, the insurer settles the claim amount as per the limits mentioned in the policy document. The concept of co-payment is more prevalent in a corporate health insurance, where the employer offers health coverage for employees and their families. In certain cases, employers insist on co-payments in case of parents of employees. As medical cost is high in case of senior citizens, a co-payment clause ensures that at least a part of the claim is paid by the employee itself.
6. Go for two-year policies: Now various insurers offer two-year health policies. By opting for a two-year policy term, you can enjoy discounted premium rates. For instance, some insurer’s offer 10% discount to policyholders who opt for two-year policies.
7. Get benefits of a no claim bonus (NCB): There are various insurance companies which offer a benefit of no claim bonus if there is no claim in the previous year. Before purchasing a policy, do not forget to check whether the insurer offers a no-claim bonus or not. You can use this bonus to get an additional sum insured without paying any extra premium. For instance, a Complete Health Insurance Plan offers an additional sum insured of 10%, if there is a claim free year, subject to a maximum of 50%.
8. Buy medical insurance online: As online mediclaim policies are much cheaper than their offline counterparts, it is advised to buy policies online to lower your premium burden. In online policies, the agent’s role is eliminated and thus, the insurer saves on commission and administration costs. This benefit is passed on to prospect insurance buyers in the form of low premium rates.
9. Get healthy and fit: This is an important aspect to be considered not only to cut your premium rates but also for your own well-being. If you are a smoker, you should quit it today. If you are obese, hit the gym. Insurance companies reward healthy people in the form of low premiums rates.

These are some smart ways to lower your insurance burden. If you follow them prudently, you can surely trim your premium rates.

(The article has been authored by Utkarsh Sahu, a digital strategist and contributor to business magazines, such as Business Insider, Huffington Post, Tech Radar, etc.)

(Image: Thinkstock)