In a relief to senior citizens, the Insurance Regulatory and Development Authority of India (Irdai) has limited annual premium hikes on health insurance policies sold to them to 10%.
In a circular issued on Thursday, the regulator directed all health and general insurers offering indemnity-based health insurance to limit annual premium increases for senior citizens. The move follows multiple complaints from elderly policyholders about steep premium hikes, making health insurance unaffordable.
Irdai said insurers must seek its approval if they propose an annual increase of more than 10%, or if they plan to withdraw individual health insurance products for senior citizens.
Unlike the Pradhan Mantri Jan Arogya Yojana (PMJAY), where hospitalisation costs are centrally negotiated and standardised, private health insurance policies have no such price regulation. “This is leading to higher hospitalisation costs, resulting in higher claims outgo under health insurance products offered by insurers,” Irdai said.
“By capping premium increases at a maximum of 10% per year, the regulation introduces pricing predictability, ensuring that senior citizens are not burdened by steep cost escalations,” said Hanut Mehta, CEO and co-founder of Bimapay Finsure. The regulatory move will also help insurers retain customers and reduce policy lapses due to unaffordable premiums, he added.
The insurance regulator has been introducing several customer-friendly measures, including setting time limits for cashless claim approvals, reducing waiting periods for pre-existing and chronic conditions and requiring insurers to provide a customer information sheet with every policy to explain key features in simple terms.
In April 2024, Irdai removed the age limit of 65 years for purchasing health insurance, allowing more senior citizens to access coverage.
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