CTI Raises Alarm Over Soaring Health Insurance Premiums: In a significant move aimed at highlighting the growing financial strain on the middle class and small traders, the Chamber of Trade and Industry (CTI) has raised a red flag over the sharp rise in health insurance premiums in India. CTI chairman Brijesh Goyal, in a letter to Finance Minister Nirmala Sitharaman, pointed out that health insurance premiums have risen by 15% to 20% over the past few years. This steep increase, he said, is making it unaffordable for many families to maintain their insurance coverage, leading to widespread policy discontinuations and reduced health security.
The CTI emphasized that the middle-income group and small business owners are bearing the brunt of this spike in premiums. With inflation already squeezing household budgets, the added burden of rising insurance costs is becoming unsustainable. Goyal highlighted that many individuals, including small traders, are reluctantly giving up their health insurance policies due to unaffordability, which poses a major risk in times of medical emergencies.
Furthermore, the CTI accused the Insurance Regulatory and Development Authority of India (IRDAI) of inefficiency, stating that it has failed to effectively regulate and monitor arbitrary premium hikes by insurance companies. The chamber noted a decline in overall insurance coverage, with health insurance coverage dropping from 4.2% in 2021–22 to 4% in 2022–23, and life insurance coverage falling from 3.2% to 3% during the same period. The CTI has urged the government to issue clear guidelines to curb unjustified premium hikes and protect common citizens from exploitation.
Who Can Apply for Health Insurance?
Health insurance in India is available to all citizens, including:
- Salaried professionals
- Self-employed individuals
- Small business owners
- Senior citizens
- Students
- Families (through family floater policies)
Many insurance providers offer customized plans for different income brackets and health needs. However, the rising premium costs are now making even basic plans harder to afford, especially for low- and middle-income households.
Also read: Zurich Kotak General Car Insurance: A Complete Guide for Indian Car Owners
Health Insurance Premium Fees
The cost of health insurance in India varies based on:
| Factor | Impact on Premium |
|---|---|
| Age of insured | Higher age = higher premium |
| Pre-existing conditions | Increases cost |
| Sum insured | Higher cover = higher premium |
| City of residence | Metro cities cost more |
| Type of policy | Individual, family floater, critical illness etc. |
Average Premiums (Before and After Hike):
| Type of Policy | Previous Annual Premium | New Average Premium (Post-Hike) |
|---|---|---|
| Individual (30 yrs, ₹5L cover) | ₹7,000 – ₹9,000 | ₹8,500 – ₹11,000 |
| Family Floater (2 adults + 2 kids, ₹10L cover) | ₹15,000 – ₹20,000 | ₹18,000 – ₹24,000 |
| Senior Citizen Plan | ₹22,000 – ₹30,000 | ₹26,000 – ₹36,000 |
How to Use Health Insurance?
Using your health insurance effectively involves:
- Hospitalization at Network Hospitals – Use cashless treatment at empaneled hospitals.
- Reimbursement Option – For non-network hospitals, submit bills for claim.
- Day Care Procedures – Many plans now cover procedures that don’t require 24-hour hospitalization.
- OPD and Preventive Care – Some plans include consultations, diagnostics, and health check-ups.
Keep documents handy, including:
- Health card
- Policy number
- Aadhaar card
- Doctor’s prescription or admission advice
Benefits of Health Insurance
- Cashless Hospitalization in network hospitals
- Financial security during medical emergencies
- Tax benefits under Section 80D of the Income Tax Act
- Free annual health check-ups
- Coverage of critical illnesses, daycare procedures, maternity (if opted)
Timely health insurance protects against the skyrocketing cost of private healthcare, which is unaffordable for many Indians today without support.
How to Apply for Health Insurance
Offline Mode:
- Visit your preferred insurance company branch.
- Submit required documents and fill out the application form.
- Medical check-up may be required for older individuals.
Online Mode:
- Visit official insurance websites or aggregators (like PolicyBazaar, Coverfox).
- Compare different plans and premiums.
- Upload KYC and health declaration details.
- Make payment to activate policy. National Health Authority
Required Documents:
- Aadhaar Card
- PAN Card
- Passport-sized photo
- Address proof
- Medical reports (if applicable)
Important Dates
While health insurance policies are available year-round, here are a few important timelines:
| Event | Date |
|---|---|
| Premium Revision Period | April – June (annually for most insurers) |
| Income Tax Deduction (Sec 80D filing) | Before March 31 every year |
| IRDAI Policy Guidelines Review | Periodically, usually once a year |
Disclaimer
This article is intended for informational purposes only and is not a substitute for professional financial or insurance advice. Premiums and benefits vary across insurance providers and should be verified directly with the company or via trusted brokers. The data in this article is based on public domain information and recent news as of June 2025.
CTI Raises Alarm Over Soaring Health Insurance Premiums Conclusion
The rising cost of health insurance is fast becoming a national concern, particularly for the middle class and micro-business owners. CTI’s appeal to the Finance Ministry underlines how arbitrary and sharp premium hikes can jeopardize the financial stability of millions, especially in a post-pandemic world where health insurance is more critical than ever.
By demanding government regulation and IRDAI accountability, the CTI is attempting to realign the insurance sector with the public interest. If insurers are allowed to operate unchecked, the result could be a shrinking insured population and an overburdened public health system in the years to come.
Health insurance should ideally be a safety net, not a financial trap. To preserve this intent, both policy-level interventions and customer-centric reforms are essential. Transparency in premium structures, better grievance redressal mechanisms, and regulation of arbitrary hikes can go a long way in restoring public trust.
Until systemic solutions are in place, individuals are advised to compare plans carefully, use aggregators, and seek policies with guaranteed renewal and premium cap clauses to avoid sudden shocks. Informed consumers, after all, are the first defense against exploitation in any market.
CTI Raises Alarm Over Soaring Health Insurance Premiums FAQs
1. Why are health insurance premiums increasing in India?
Health insurance premiums are rising due to multiple factors including inflation in medical costs, higher hospitalization rates, and post-pandemic underwriting changes. Insurers also reassess risk annually and adjust premiums accordingly. However, CTI claims that many of these hikes are unjustified and arbitrary, hence the call for government regulation.
2. Can the government regulate insurance premiums?
Yes, the IRDAI (Insurance Regulatory and Development Authority of India) has the authority to frame rules and monitor premium hikes. But according to CTI, its current oversight has been ineffective, and it has failed to prevent insurers from exploiting customers. CTI is urging the Finance Ministry to enforce stricter control.
3. What can policyholders do if they can’t afford rising premiums?
Policyholders can:
- Port to another insurer with lower premiums.
- Reduce the sum insured temporarily.
- Opt for top-up plans instead of full policies.
- Use government health insurance schemes like Ayushman Bharat if eligible.
4. What are the tax benefits of health insurance?
Under Section 80D of the Income Tax Act:
- Up to ₹25,000 deduction for self and family
- Additional ₹25,000 for parents (below 60 years)
- ₹50,000 if parents are senior citizens
This makes health insurance not just a health investment but a tax-saving tool.
5. How can I ensure I’m not overpaying for health insurance?
- Compare policies online on trusted portals
- Avoid unnecessary riders and high coverages
- Choose a plan with stable renewal terms
- Read the policy documents carefully and look for fine print about yearly hikes
- Consult a trusted insurance advisor
One thought on “CTI Raises Alarm Over Soaring Health Insurance Premiums: Urges Government Intervention for Relief”