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What is Inflation Protection in Health Insurance?

Team AckoJan 27, 2023

Medical inflation, or the rising prices of healthcare services and treatments, can make it increasingly difficult to access quality medical care. If your health plan is not adjusted for inflation, you might end up paying comparatively more money out-of-pocket in case of unfortunate events like hospitalisation. Thus, you need to take proactive steps to protect yourself and your family from the effects of inflation on medical treatment. This is where the Inflation Protection feature in Health Insurance can come to your aid. Let's dive deep into it!

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Contents

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What is the “Inflation Protection” feature In Health insurance?

The ability to safeguard yourself against the increasing expense of healthcare services is made possible by the Inflation Protection feature in health insurance plans. The sum insured (the amount of coverage) will automatically rise each year or after a fixed number of renewals to keep up with inflation, thanks to this feature. This helps to ensure that you are not underinsured over time and are protected from financial problems in a medical emergency.

How does Inflation Protection work in Health Insurance?

The Inflation Protection feature allows you to select ‘Inflation Protection’ while purchasing the health insurance policy. When this option is enabled, the policy's sum insured will increase periodically by a specified percentage, usually in line with the inflation rate. This increase in the sum insured helps ensure that your medical expenses are sufficiently covered even when healthcare costs rise over time.

The percentage of growth in sum insured and the frequency of increase vary from one insurer to another. Some health insurance policies provide a 5 to 10% annual rise, while others provide an increase after a set number of years. Some policies additionally allow you to select the rate of increase or the frequency of increase.

It's vital to remember that choosing Inflation Protection will result in a higher policy premium. As a result, you should compare the cost against the advantage of appropriate coverage in the event of unexpected medical bills.

What are the different types of Inflation Protection features offered under a health plan?

The following tables lists different types of Inflation Protection features offered under a health plan.

Types of Inflation Protection

Description

Automatic Inflation Protection

medical inflation.

Optional Inflation Protection

It refers to a feature in some health insurance policies where the policyholder can decide whether or not their sum insured amount will be automatically increased each year to keep up with inflation.

Why is Inflation Protection Important in Health Insurance?

Inflation Protection is important in health insurance because it helps to ensure that you are not underinsured over time. The cost of healthcare services tends to rise with inflation, so if the sum insured or the amount of coverage does not increase with inflation, you may not have enough coverage to pay for the medical services you need.

Without Inflation Protection the coverage becomes less valuable as time goes by. This feature keeps the coverage at the same level of purchasing power, so you have enough coverage to pay for a medical emergency.

As the medical facilities available in India are improving and the associated medical cost is overall increasing, it becomes important for people to have health insurance that keeps up with the rising cost of healthcare services. The Inflation Protection feature is one of the ways to keep up with it.

How does Inflation Protection benefit Health Insurance policyholders?

Inflation Protection benefits health insurance policyholders in the following ways.

  • Protection against underinsurance: Inflation protection works to prevent underinsurance and ensures that policyholders have enough coverage to pay for the medical treatment they require as the cost of healthcare services rises over time.

  • Maintaining the value of the coverage: The amount covered is automatically increased to keep up with inflation as part of Inflation Protection, which helps preserve the coverage's value over time. In spite of rising healthcare costs, this helps to guarantee that policyholders have adequate coverage to pay for the necessary medical treatments.

  • Cost-effective: Raising coverage in line with inflation makes this feature a cost-effective choice for policyholders.

  • Peace of mind: With Inflation Protection, policyholders may rest easy knowing that even when healthcare costs rise, they will have adequate coverage to pay for the necessary medical treatments.

How does Inflation Protect work at ACKO?

At ACKO, we offer the Inflation Protect benefit with our Health Insurance Plans. You will get a percentage-wise increase as per the sum insured of your plan upon completing ten continuous policy years. Here the sum insured of the plan will be considered while calculating the applicable increase under the Inflation Protect benefit.

Things to keep in mind while opting for Inflation Protection in health insurance

While opting for Inflation Protection in health insurance in India, it's important to keep the following things in mind.

1. Understand the terms and conditions

It is essential to consider the Inflation Protection feature's terms and conditions, such as: By what percentage will the coverage rise annually? Is it automatic or optional? What is the maximum increase? You can choose to get Inflation Protection with certainty if you know the answers to these questions.

2. Consider your current and future needs

Consider your current and future healthcare needs while deciding whether or not to opt for Inflation Protection. Are you likely to need more coverage in the future due to factors such as advancing age or a family history of certain medical conditions? If so, this feature may be a good idea. On the other hand, Inflation Protection may not be necessary if you expect your healthcare needs to stay the same in the future.

3. Compare policies

Compare policies from different insurance companies to see which ones offer Inflation Protection and how it works. Some policies may offer automatic Inflation Protection, while others may require you to opt-in each year. Some policies may also offer more generous increases than others. Comparing policies can help you find the one that best meets your needs.

4. Cost

Consider the cost of the Inflation Protection feature and how it affects the overall premium of the policy. It's important to find a balance between having enough coverage and not overpaying for it.

5. Review your policy regularly

Review your policy regularly to see if the coverage is still sufficient and if the Inflation Protection feature is working as expected. It's important to ensure that the policy meets your current and future healthcare needs and that the Inflation Protection feature is working as intended.click here to check the Acko health insurance product 

Frequently asked questions

Here are some common questions and answers about Inflation Protection in Health Insurance.

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Does health insurance's Inflation Protection affect premium rates?

Yes, in most cases, Inflation Protection in health insurance influences the premium rate. To add this option to their coverage, policyholders will most likely have to pay an additional premium.

Is Inflation Protection offered with all types of health insurance policies?

All insurance companies do not offer Inflation Protection for all types of coverage. Some providers may only give it for specific plans, such as Family-floater or Individual Health Plans. It is necessary to verify with your insurer to see if this feature is available for your policy.

Does Inflation Protection cover all medical bills or only a part of them?

Inflation protection is intended to cover the rising cost of medical treatment. However, the expenses may vary depending on the insurance provider and policy. It is critical to check with your insurance provider about the exact expenses that are covered by Inflation Protection.

Is Inflation Protection available in health insurance during the policy period or only at renewal?

Some insurance companies may provide it as an option throughout the policy period, while others may only provide it at the time of renewal. It is critical to confirm your insurance provider's policies and processes before opting in.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet, and is subject to changes.

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