You open your renewal email and the price is higher again. It feels unfair, especially if you hardly visited a hospital last year. Many families ask the same question: why do health insurance premiums increase every year, and is there anything we can do about it?
According to a recent survey by LocalCircles, 52% of policyholders stated an increase in the premiums by over 25% in the last 12 months. As per 21% of the policy owners, their premiums increased by 50% or more. This blog explains the real drivers in India, and shows practical steps to maintain strong coverage without overspending when health insurance premiums increase every year.
Why Prices Rise In The First Place
Health insurance premiums are calculated based on the expected costs for the upcoming year. If the anticipated costs of healthcare in your city increase, then the premiums for the following year will also rise. This is the primary reason why health insurance price rises each year. Additionally, your personal risk is taken into account; as we age, develop health conditions, or add family members, both the likelihood and the size of claims may change.
Finally, market and policy updates matter. When benefits expand or rules tighten, the underlying cost of protection can rise; this is another way health insurance premiums increase every year.
The Price Drivers In India
1. Medical Inflation
- In India, medical costs tend to rise faster than general inflation. When surgery packages, diagnostics, devices, and specialist time get pricier, the average claim amount rises, so next year’s premium rises too. This is the most consistent reason health insurance premiums increase every year.
2. Hospital And Medicine Costs
- A hospital bill is a bundle: room rent, procedure fee, consumables, implants, and medicines. If big components become more expensive, the total climbs. That change is felt at renewal, which is another reason health insurance premiums increase every year.
3. Technology And Advanced Care
- Better imaging, minimally invasive procedures, robotic assistance, and newer drugs improve outcomes and recovery time. These advances are valuable, but newer technology often costs more at the start. As advanced care becomes common, the average cost per claim can rise, which helps explain why health insurance premiums increase every year.
4. Age Bands And Risk
- Insurers typically categorize prices into age bands, such as 18-35, 36-45, 46-60, and 60 and over. When you move into a higher age band, your base price increases because the expected risk associated with health insurance rises with age. This is a common reason why health insurance premiums tend to increase each year around milestone birthdays.
5. Claim History And Loadings
- If you have a year with significant or frequent hospitalisations, the next renewal may carry a loading and an extra charge applied to reflect the higher expected cost. Clean documentation makes underwriting smoother, and consistent health checks can reduce surprise admissions. Still, claim-heavy years are a clear pathway by which health insurance premiums increase every year.
6. Regulatory And Plan Changes
- From time to time, benefits are widened or clarified. Examples include richer day-care definitions, wellness credits, or OPD riders. Broader cover protects more situations, but it also increases the cost of insuring a life. That, too, is a reason health insurance premiums increase every year, even for people who never claim.
7. Administrative And Operating Costs
- Operating costs such as servicing policies, managing large cashless networks, improving claims systems, and adhering to compliance standards all incur expenses. When these costs increase, a portion may be reflected in pricing. While it is not the primary reason, it does contribute to the annual rise in health insurance premiums for certain segments.
What You Can Do At Renewal
You cannot control medical inflation, but you can control how efficiently your plan converts premiums into protection. The goal is to keep coverage strong while reducing waste in the way you buy it, especially in years when health insurance premiums increase.
1. Compare And Right-Size The Plan
- Once a year, check whether the plan still fits your city, your hospitals, your family size, and your budget. Confirm the network includes the hospitals you would actually use. Review sum insured, room-rent limits, and sub-limits. If the fit is off, consider portability to a plan that matches your needs; portability can preserve waiting periods. This habit alone reduces frustration when health insurance premiums increase every year.
2. Use A Super Top-Up Instead Of Only Raising The Base
- If you’re primarily concerned about facing a rare but significant medical bill, adding a super top-up with a reasonable deductible can be more cost-effective. This approach can be better than merely raising your base coverage. Set the base coverage high enough to handle common medical admissions, while the top-up protects more unforeseen expenses. This approach can help you maintain financial security even as health insurance premiums rise each year.
3. Choose Room-Rent Limits That Match Your City
- Tight room caps can trigger proportionate deductions. Pick a limit that matches private room rates in the hospitals you prefer, so you are not forced into expensive upgrades or avoidable deductions. Smart room caps help you avoid surprises at claim time, which matters when health insurance premiums increase every year.
4. Consider A Modest Co-Pay Or Deductible
- If cash flow allows, sharing a small portion of risk can reduce the base price and moderate future jumps. Start modest and review yearly. Do not choose a co-pay so large that it would delay needed care. This is one lever that keeps budgets predictable when health insurance premiums increase every year.
5. Protect Your No-Claim Bonus
- A No-Claim Bonus (NCB) grows your sum insured in claim-free years. An NCB-Protector add-on can help retain it after small claims, so the cover does not whiplash up and down. Protecting NCB is a simple way to keep meaningful cover even if health insurance premiums increase every year.
6. Consider A Multi-Year Term
- Many plans offer two- or three-year terms with discounts or hold-in rates. Paying upfront is not for everyone, but longer terms can stabilise the total you pay over time. That is useful in periods when health insurance premiums increase every year across the market.
7. Keep Documents In Order
- Keep track of prescriptions, investigation reports, and discharge summaries. Well-organised paperwork reduces disputes and accelerates decision-making. Streamlined claims and fewer endorsements make renewals clearer, which is beneficial as health insurance premiums rise annually.
Stay or Port: A Practical Renewal Guide
Choosing to remain with your current insurer or to port is easier when you focus on fit, not just price.
Stay with your current plan if:
- Your cashless network includes the hospitals you actually use (check your PIN-code list).
- Your room-rent limit matches typical private-room rates at those hospitals.
- The increase is clearly age band + inflation (no heavy loading), and the benefits still suit your needs.
Consider porting if:
- Your preferred hospitals are out of network or were recently dropped.
- You faced proportionate deductions due to a low room cap and the insurer won’t offer a realistic cap.
- You’ve had persistent service issues (slow authorisations, messy reimbursements) and another plan offers equal or better benefits with stronger service.
- You’re paying for unused riders and a comparable plan gives the essentials without bloat.
Before you port:
Get waiting-period portability confirmed in writing (pre-existing and listed illnesses), compare sub-limits and exclusions side-by-side, and check senior-age rules (co-pays, renewal age limits). Port only if the new plan truly fits your hospitals, budget, and risk.
Conclusion
Prices move because the cost and risk beneath your cover change. That is why health insurance premiums increase every year even for people who did not claim. The fix is not to cut essential benefits but to buy precisely what you need and nothing you do not. Review the plan each year, right-size the base, use super top-ups for tail-risk, protect your NCB and keep documents tidy. Turn these into habits and you stay protected even in years when health insurance premiums increase every year.
Looking for a plan that fits your hospitals and budget? Explore Even Healthcare and Even Health Plans in the Even app, then open Chat Support or ask Even Steven (AI bot) for a quick recommendation. When you’re ready, our Renewal Team and chat support will help finalise the best option for your needs.