The GST Council reduced the 18 percent GST on health insurance premiums to zero in September, but customers are not receiving any benefits. Most insurance companies have increased their total premiums compared to last year. Arun Chattha
Arun Chattha
The GST Council reduced the 18 percent GST on health insurance premiums to zero in September, but customers are not receiving any benefits. Most insurance companies have increased the total premium compared to last year. The increase ranges from 10 to approximately 37 percent.
Vehicle and health insurance premiums have seen the highest increases. Tata AIG General Insurance Company Limited has increased health insurance premiums by approximately 37 percent compared to last year.
Hindustan emailed Tata AIG with full policy details regarding the health insurance premium increase. The company explained that last year’s health insurance policy premium was ₹30,107, which included 18 percent GST, or ₹4,592.
Since the government removed GST on September 22nd, the premium should now be ₹25,515, but the company is demanding ₹34,899. This represents a 36.78 percent increase. Not only Tata, other companies have also increased premiums significantly.
The company cited medical inflation, market trends, and rising costs of claims and services as reasons for the increase. The company stated that the premium increase was in accordance with IRDA guidelines. On this, the company was again mailed and asked by what percentage the inflation has increased compared to last year and whether the 37 percent increase in premium has been done after taking permission from IRDAI.
Company representative Ankit Yadav provided a vague response. He did state that the policy includes inflation protection of ₹416.46, Restore Infinity Plus of ₹1,166.10, and an annual premium increase of ₹3,210.
This is how the burden on policyholders is increasing:
Most companies are increasing premiums by adding new riders (features and coverages) to policies. No consent is obtained from the policyholder before adding riders. Many companies are also adding premiums to coverage already included in the policy, claiming them to be new.
Last year, Niva Bupa Health Insurance Company sold a policy with insurance coverage of ₹750,000 for ₹16,731, including GST of ₹2,552.22. This year, after the GST was removed, the total premium should have been ₹14,178.78. However, the company has declared the premium for the policy, which is due for renewal on November 14, to be ₹17,155.
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