India’s medical inflation is about 14 per cent compared to 4-5 per cent retail inflation, according to a report by the insurer Plum. At this rate, a treatment costing Rs 1,000 today could be twice that amount in 10 years. This colossal cost burden is instructive of why one must factor in future healthcare costs in retirement planning, or these expenses can eat into your corpus for old age.

So what can one do to bring down the cost of health insurance? Says Parthanil Ghosh, director and chief business officer at HDFC ERGO, “Keeping health insurance premium costs low is essential to manage healthcare expenses.” He suggests that maintaining a healthy lifestyle, and availing of discounts, such as loyalty and renewal discounts, can make insurance affordable.

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A Top-Up Cover Can Reduce Cost

One of the effective ways to reduce the premium outgo is to buy a top-up policy with a base plan, which can be of smaller coverage, but supplementing it with a bigger top-up cover.

This strategy can address the issue of insufficient coverage due to high premiums, especially for seniors. Insurers may be unwilling to provide them higher coverage due to underwriting issues.

Top-up policies come with a deductible (the amount the policy will not pay for), which must be borne by the policyholder. Hence, insurers typically charge much lower premiums for top-up policies. The sum insured of the base policy should ideally be equal to the deductible to cover that gap. Ghosh says the higher the deductible, the lower will be the premiums.

Many experts also recommend buying the base policy and the top-up or super top-up policy from the same insurer to ensure that the claim settlement process is smooth later.

Porting Can Also Help Cut Cost

If you already have a high-cost policy, you could consider porting to a cheaper one.

Apaar Kasliwal, executive director of PolicyBoss.com, an insurance aggregator, told Outlook Money in a previous interview: “In case you are dissatisfied with your current insurance cover, or, the insurer is not willing to offer new-age covers available with other insurers, or dissatisfied with the hospital network offered by your insurer, you may consider porting your health insurance policy.” However, it is important to look at the features of the new policy before porting. The new policy could be cheaper because it has higher deductibles, sub-limits, restrictions on the treatment of some diseases, and so on.

Family Floater Plans May Make Sense In Some Cases

Family floater policies may not be advisable if the premiums are calculated based on the age of the eldest member. However, they may make sense in some cases. Says Puri: “If the premium is calculated based on the age of the eldest member, one should buy a separate policy for parents and one for the husband, wife, and the child. However, if the premium is calculated based on individual insured persons, then one must opt for a family floater policy. This will provide an added benefit of a higher family floater discount on the total premium.”

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Prevention Is Better Than Care

Taking preventive healthcare measures can also help reduce costs, as insurers look at a healthy lifestyle favourably. Tapan Singhel, chief executive officer and managing director of Bajaj Allianz General Insurance, in a recent interview with Outlook Money, talked about how it benefits the industry: “If people are healthier, the claims should be lower. So, it’s benefiting the insurance companies. What we don’t realise is the basics of the insurance business. You collect money from many to pay to a few. So, if the claim outgo reduces, the overall premium reduces.”

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