Health insurance for senior citizens: No clarity on implementation of 10% premium hike cap

They were shocked to see the further rise in their premium in February 2025. The insurer hiked it by 40% to ₹69,048. 

To be sure, an Insurance Regulatory and Development Authority (Irdai) circular released in January capped insurers’ annual premium hikes at 10% for senior citizens aged 60 years and above.

“The insurers shall not revise the premium for senior citizens by more than 10% per annum,” Irdai said in the circular. 

It also specified two key scenarios requiring prior consultation: If an insurer intends to hike premiums beyond the 10% cap or withdraw an individual health insurance product for senior citizens.

Has the circular been implemented?

The circular mentions that insurers need to take steps in this direction “with immediate effect”, but this does not seem to have happened.

“Irdai, hereby, directs all general and health insurers offering indemnity-based health insurance products to senior citizens to take the following steps, with immediate effect,” said the circular. 

The two steps included the instruction not to hike the premium by more than 10% and to seek prior consultation from the regulator if necessary or withdraw a product offered to senior citizens.

However, the reason for premium hikes crossing the 10% cap could be that the product pricing was filed before the circular came out. “Policyholders must know that wherever product pricing has been filed and approved by Irdai before the circular came out, the price increase for all policyholders will happen whenever their premiums are due. The circular will come into effect next time insurers apply for the price hike to Irdai,” said Narendra Kumar Bharindwal, director, vice president at the Insurance Brokers Association of India (IBAI).

Still, there are some nuances that require clarity.

There are two kinds of price hikes in insurance products: i) age-related and ii) inflation-related. 

An inflation-related price hike happens at a product level, impacting all policyholders. An age-related price hike is specific to a policyholder when their age band changes. Age bands range from 31 to 35, 36 to 40, 41 to 45, 46 to 50, and so on.

“This change takes immediate effect for any inflation-linked price hikes planned by insurers. However, pricing changes related to age bands will still apply,” said Siddharth Singhal, business head, health insurance, Policybazaar.com.

“This is a positive move that aims to create more uniform pricing for senior citizens, as currently, premium inflation occurs every three to four years or more, often in a lump sum, which can strain senior citizens finances,” he added.

Bharindwal, however, said it is unclear if the price hike in the context of the Irdai circular includes both. “It must include both; otherwise, it will defeat the spirit of the circular. Insurance companies have reached out to Irdai to seek clarification on the circular. My understanding is that the circular will be implemented only after 1 April, even though it mentions immediate effect.”

He also clarified that while the circular favours senior citizens, it may negatively impact younger policyholders because insurers may pass on the price hike to them to keep the loss ratios in check at a product level.

Meanwhile, senior citizens can opt for deductibles or earn wellness rewards to reduce the premium to some extent. “Insurance companies are offering more discounts, such as opting for preferred networks, lower-category rooms, or features like deductibles and co-payments, to help manage premium costs,” said Singhal.

A deductible is the amount that a policyholder pays by himself before the policy coverage kicks in. It helps reduce premiums by a certain percentage depending on the deductible amount. Similarly, if a senior citizen walks a certain number of steps every day, she would be eligible for some discounts. Enquire about these benefits from your insurer.

Queries sent to Irdai and insurance companies such as Star Health, Niva Bupa, Aditya Birla Health Insurance, and Zuno Health Insurance remained unanswered.