Claim loading in a health insurance policy

What is Claim Loading in Health Insurance?

All of us are buying health insurance policies to take care of any medical expenses that may occur during the term of the policy. But, you will feel cheated, if your insurance company increases the future premium in case of a claim. Yes, that is exactly happening with most of the health insurance policies.

How claim loading will affect you?

In a health insurance policy, you have to pay premium every year. Many insurance companies are having a claim loading clause in their policy. As per this clause, your premium will be increased in case there is a claim in the previous year.

There is no standard rate among all companies in this. The increase is different for different companies. It makes all the more important to study the loading clause at the time of taking the policy.

What to look for while buying a health insurance policy?

While buying a policy, normal tendency is to look for policies with lower premium. It is not the correct way in health insurance. Though, health insurance policy is to be renewed every year, treat this as a long term policy, where you have to pay premium every year. Some companies claim loading can go upto 200% of the premium! You may get such policies at a lower premium compared to other policies. But, after some claim, your premium will become very high and unaffordable.

It is important that, you study the claim loading mechanism of the policy before buying it. If you are not clear about the way the company will load the premium in case of any claim, ask for such details before buying the policy. Please buy a policy with a clearly defined claim loading rules.

What about existing policy holders?

Please read the claim loading clause in your health insurance policy and find out whether the company has done the increase in premium as per the clause. If there are variations, point out to the company and ask for a reduction in premium.

The other option is to use the portability facility and switch your policy to another health insurance company, which offers better terms and conditions. But, if you have a claim history, the chances of the new company accepting your policy is remote.

Better do it when your health conditions are good and before really making any claims.

Companies like Max Bupa and Apollo Munich offers policies without any claim loading. You have to really do a cost benefit analysis before buying the health policy.

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