The new IRDAI rules on elderly premiums

February 20, 2025 Finance Talk Valli Sarvani

The Insurance Regulatory and Development Authority of India (IRDAI) has introduced new measures to address the steep rise in health insurance premiums for senior citizens, particularly in light of premium hikes that have reached as high as 100%.

To curb these increases, IRDAI has set a cap of 10% on the annual premium hikes for individuals aged 60 and above.

Under the new rules, insurers are prohibited from raising premiums by more than 10% annually for senior citizens.

If an insurer needs to raise premiums beyond this limit, they must seek prior approval from IRDAI.

In addition to this, insurers are also forbidden from cancelling health insurance policies for senior citizens without obtaining permission from IRDAI.

This move is intended to offer more stability and protection for seniors in the face of rising healthcare costs.

However, a consumer activist has raised concerns that permitting insurers to cancel policies with regulatory approval might undermine the security that seniors currently have.

He also pointed out that the current laws prohibit insurers from forcing policyholders into new, potentially more expensive policies, which could be a significant issue for seniors.

The Supreme Court ruling in the Biman Krishna Bose vs. United India Insurance case further strengthens the protection for seniors, confirming that insurers must renew policies under the same terms.

While IRDAI is taking steps to protect existing policies, there are concerns regarding new policies.

Shilpa Arora, the COO of Insurance Samadhan, has warned that insurers might impose stricter requirements for new health insurance.

These include higher premiums, longer waiting periods, and more exclusions. This could make it more difficult for elderly individuals to secure new coverage.

Moreover, industry experts fear that insurers may alter policy terms during renewals, potentially adding sub-limits on diseases or hospital room rent.

The true effectiveness of IRDAI’s intervention will depend on the rigorous enforcement of these new rules and whether insurers find alternative ways to raise costs for seniors.

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