There has been an increase in the premiums of health insurance products recently owing to the implementation of standardisation guidelines issued by the Insurance Regulatory Development Authority of India (IRDAI), say insurance experts.
These guidelines standardise all the exclusions with an intent to make the policies easy to comprehend for the customers.
“However, as of September 30, out of the total 388 products, premiums of only 55 products have been increased by both general and health players, that too up to 5 percent,” clarified Bhabatosh Mishra, Director – Products, Underwriting & Claims, Max Bupa Health Insurance.
The insurance regulator recently came out with a clarification that insurers were permitted to change the base premium up to +/- 5 percent of originally approved premium rates, in order to comply with the guidelines on standardisation of exclusions as a one-time measure.
"This has been done for seamless transition of existing products to ensure viability and sustainability," the insurance regulator said.
Further, IRDAI has cleared revision in premiums beyond 5 percent in respect of only five health insurance products of general and health insurers during the year up to November 30, 2020 as part of the periodical modification of their respective products.
Meanwhile, the other factor contributing to the spike in premiums in 2020 has been medical inflation which has gone up by 19.5 percent owing to the current pandemic, opined Mishra of Max Bupa Health Insurance.
Further, as Mishra said, overcharging by hospitals for COVID-19 treatment is another reason for a premium increase.
"There is no standard cost for the treatment and many have been charged up to 20-25 lakhs. In such a scenario, insurers were automatically forced to increase the premium to sustain in the market," he added.
On the other hand, several significant changes took place in 2020 in the health insurance industry such as the launch of new products, the introduction of telemedicine facilities, among others.
The IRDAI also announced several relaxations for customers in 2020 in view of the unprecedented situation prevailing in the country due to the coronavirus pandemic.
IRDAI allowed general and standalone health insurers to give policyholders the option to pay health insurance premiums in installments. Policyholders can now pay their annual health insurance premiums on a monthly, quarterly, or half-yearly basis.
IRDAI also permitted all general and specialised health insurers to validate health insurance policy proposal forms through digital means in place of physical signatures. The regulator has also given an option to the policyholders to give their agreement to the insurer via a one-time-password, without using a wet signature on the hard copy of the proposal form.