Sucheta Dalal :Not just will premiums rise your insurance cover will also shrink
Sucheta Dalal

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Not just will premiums rise, your insurance cover will also shrink  

May 5, 2010

 The health insurance industry has been suffering as corporate healthcare is becoming an expensive business for insurers, with claims shooting up. Ergo, consumers will soon bear the brunt of higher premiums and stricter cover norms, while applying for a health insurance cover.


“The claims ratio in the health insurance sector has increased and this has made many insurance companies to jack up their premiums. Many companies are planning to reduce the add-ons they were planning to provide to their covers, for their upcoming products,” an official from a major insurance company said.


He added that the rising premiums and reduced covers are only meant to restrict some of the privileges policyholders received, so as to bring down losses and control the flow of cash.


The official added that these new products with increased premium and reduced covers will be introduced—somewhere between August and September—after approval from regulator Insurance Regulatory and Development Authority (IRDA).


Under the fresh (proposed) hospitalisation norms, stricter caps for hospital room rents are also on the cards. Also, the age limit for medical tests, which are conducted after the age of 40, would now be reduced to 35 years, the official said.


These changes in premiums and covers could be a considerable disadvantage for those who wish to buy a new health cover for themselves. However, the official said that these changes will only be seen in the new products that are proposed to be introduced.


“These moves, which are being planned, are clearly to reduce expenditure for insurers,” said the official.


According to Yogin Sabnis, a certified financial planner for VSK Financial Consultancy Services Pvt Ltd, policyholders would now have to insure themselves early.


As Moneylife has reported earlier (, insurers are trying to cut out third-party administrators from the chain to improve customer service and cut costs.


Health insurance has turned out to be the fastest-growing segment in the business. However, the dramatic rise in health insurance premiums in the last few years has thrown households off-balance, and has also impacted companies severely. In most cases, the claims ratio in the corporate group health insurance segment is over 100%.— Aaron Rodrigues

-- Sucheta Dalal