Insurance Regulatory and Development Authority of India (IRDAI) issued a circular on January 30, 2025, to address rising health insurance premiums for senior citizens aged 60 and above. Observing steep increases in premium rates, IRDAI has capped annual premium hikes at 10% for this age group. Any proposed revision beyond this limit or withdrawal of health insurance products for senior citizens requires prior consultation with the regulator. IRDAI also directed insurers to publicize senior citizen-focused measures and work toward common empanelment of hospitals with standardized package rates, similar to the PMJAY scheme, to mitigate hospital costs. Additionally, insurers must maintain a dedicated channel for senior citizens’ claims and grievances, with details available on their websites. These directives aim to protect senior citizens, often the most financially vulnerable, from disproportionate premium hikes and ensure fair access to health insurance.
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA
Circular Ref: IRDAI/HLT/CIR/ MISC/27/1/2025 Dated: 30th January 2025
To
All Non-Life and Stand-Alone Health Insurers except AIC & ECGC
Review of revision in premium rates under health insurance policies for senior citizens
1. The IRDAI has undertaken a series of reforms in the recent past reinforcing empowerment of policyholders and bolstering inclusive health insurance, while enabling a conducive environment for ease of doing business for promoting innovation and providing wider choice to the customers.
2. Measures taken in the interest of policyholders includes mandatory time limits for approval of cashless claims, mandating insurers to make available products / add-ons/ riders to provide wider choice to the policyholders/prospects catering to all ages; all types of medical, preexisting diseases and chronic conditions; all system of medicines and treatments; all types of hospitals and healthcare providers. The time period for considering pre-existing disease and moratorium period is reduced.
3. Furthermore, for the benefit of senior citizens, the regulatory framework requires all insurers to establish a separate channel to address their 1 health insurance related claims and grievances. The details of such channel are required to be published on the respective insurer’s website.
4. As part of the ongoing monitoring of insurance products offered in the Indian insurance market, it is observed that there has been steep increase in premium rates under some of the health insurance products offered to senior citizens (aged 60 years and above).
5. The premium rate is primarily based on the estimated claims outgo and the expenses including acquisition costs incurred by the insurance company for acquiring and servicing the insurance policies. The claims outgo is largely dependent on the amounts charged by the hospitals for various treatments/ surgeries.
6. Unlike in case of Pradhan Mantri Jan Arogya Yojana (PMJAY) scheme where the hospitalisation expenses are negotiated centrally for package rates and are thus standardised across various hospitals, there is no such standardisation in case of health insurance products. This is leading to higher hospitalisation costs resulting in higher claims outgo under health insurance products offered by insurers.
7. In this context, the most vulnerable age group is the senior citizens having limited sources of income and this group is impacted the most when there is a steep increase in health insurance premium. This matter has been engaging the attention of IRDAI and is a regulatory concern. Therefore, under the provisions of the Section 14 of the Insurance Regulatory and Development Authority Act, 1999 read with Section 34 of the Insurance Act, 1936, the IRDAI hereby directs all general and health insurers, offering indemnity based individual health insurance products to Senior Citizens, to take the following steps, with immediate effect:
a) The insurers shall not revise the premium for senior citizens by more than 10% per annum.
b) In the following cases, insurers shall undertake prior consultation with the I RDAI:
a. If the increase proposed in the premium for senior citizens is more than 10% per annum.
b. In case of withdrawal of individual health insurance products offered to senior citizens.
c) The insurers shall give wide publicity of the various measures (including the above) taken for the benefit of senior citizens while offering health insurance products.
d) The insurer shall take necessary steps for common empanelment of hospitals and negotiate package rates on the lines of PMJAY scheme.
Deepak Sood
Member (Non-Life)
Press Release
Review of revision in premium rates under health insurance policies for senior citizens
The IRDAI has undertaken a series of reforms in the recent past reinforcing empowerment of policyholders and bolstering inclusive health insurance, while enabling a conducive environment for ease of doing business for promoting innovation and providing wider choice to the customers.
Measures taken in the interest of policyholders includes mandatory time limits for approval of cashless claims, mandating insurers to make available products / add-ons/ riders to provide wider choice to the policyholders/prospects catering to all ages; all types of medical, preexisting diseases and chronic conditions; all system of medicines and treatments; all types of hospitals and healthcare providers. The time period for considering pre-existing disease and moratorium period is reduced. A Customer Information Sheet (CIS) is mandated to be provided by the Insurer along with every poky document which explains the basic features of insurance policies in simple words like type of insurance, sum insured, coverage details, exclusions, sub-limits, deductibles, and waiting periods
Furthermore, for the benefit of senior citizens, the regulatory framework requires all insurers to establish a separate channel to address their health insurance related claims and grievances. The details of such channel are required to be published on the respective insurer’s website.
As part of the ongoing monitoring of insurance products offered in the Indian insurance market, it is observed that there has been steep increase in premium rates under some of the health insurance products offered to senior citizens (aged 60 years and above).
The premium rate is primarily based on the estimated claims outgo and the expenses including acquisition costs incurred by the insurance company for acquiring and servicing the insurance policies. The claims outgo is largely dependent on the amounts charged by the hospitals for various treatments/ surgeries.
Unlike in case of Pradhan Mantri Jan Arogya Yojana (PMJAY) scheme where the hospitalisation expenses are negotiated centrally for package rates and are thus standardised across various hospitals, there is no such standardisation in case of health insurance products. This is leading to higher hospitalisation costs resulting in higher claims outgo under health insurance products offered by insurers.
In this context, the most vulnerable age group is the senior citizens having limited sources of income and this group is impacted the most when there is a steep increase in health insurance premium. This matter has been engaging the attention of IRDAI and is a regulatory concern.
In order to address the same, the IRDAI directs all general and health insurers, offering indemnity based individual health insurance products to Senior Citizens with immediate effect:
1. The insurers shall not revise the prerAurn for senior citizens by more than 10% per annum.
2. In the following cases, insurers shall undertake prior consultation with the IRDAI:
a. If the increase proposed in the premium for senior citizens is more than 10% per annum.
b. In case of withdrawal of individual health insurance products offered to senior citizens.
3. The insurers shall give wide publicity of the various measures (including the above) taken for the benefit of senior citizens while offering health insurance products.
4. The insurer shall take necessary steps for common empanelment of hospitals and negotiate package rates on the lines of PMJAY scheme.
As part of the ongoing monitoring of insurance products offered in the Indian insurance market, IRDAI will continue to keep a close watch on indemnity based individual health
insurance products offered to Senior Citizens.
