Niva Bupa CFO Vishwanath Mahendra said the insurance company has already raised premiums by 8-9% annually, and expects this to continue as medical costs rise. He said that smaller, regular hikes are preferable to a sharp increase every few years.
Niva Bupa Health Insurance retail health premium has increased 47% year-on-year in Q1, significantly ahead of the industry’s 32% growth. Overall premium grew 32%, while profit after tax nearly doubled 93% to Rs 138 crore.
But there is a big challenge for the health insurance industry: rising medical inflation. Health insurance premiums in India are projected to rise by 10% to 15% driven by annual medical inflation running at 10% to 15%.
WTW’s 2026 Global Medical Trends report estimates health insurance costs will rise 10.3 percent in 2026, after increases of 10 percent in 2025 and 9.5 percent in 2024. Asia-Pacific faces the steepest regional increase at 14 percent. In India, medical inflation has run at 10 to 15 percent annually for several years, with private hospital costs rising sharply for cardiac, oncological, and critical care treatments.
Major global benefits and actuarial reports (such as Aon and WTW) place India’s medical trend/inflation rate between 11.5% and 12.9%. Many financial and insurance providers (like Go Digit) cite peak industry averages reaching up to 14%.
How much a ₹5 lakh health cover will need to be in 10 years based on a 14% inflation rate
Based on a 14% annual medical inflation rate, a ₹5 lakh health insurance cover today will need to be ₹18.54 lakh in 10 years to provide the exact same purchasing power for medical treatments. In 5 years you will need ₹9,62,707 to buy what ₹5 lakh buys today, and then in 10 years you will need ₹18,53,611 to cover those exact same medical treatments.
The compounding effect of a 14% healthcare inflation rate means your treatment costs will nearly quadruple over the next decade:
| Timeline | Required Sum Insured (₹) | Value Erosion of a Fixed ₹5 Lakh Policy |
|---|---|---|
| Today | ₹5,00,000 | Full purchasing power (100%) |
| In 3 Years | ₹7,40,772 | Covers ~67% of today’s treatment costs |
| In 5 Years | ₹9,62,707 | Covers ~52% of today’s treatment costs |
| In 10 Years | ₹18,53,611 | Covers only ~27% of today’s treatment costs |
How to stay safe
To prevent a massive out-of-pocket expense in the future without paying exorbitant premiums today, consider these insurance tactics:
- Super Top-Up Plans: Instead of buying a massive base policy, keep a base cover of ₹5 lakh and buy a ₹15 lakh or ₹20 lakh Super Top-Up plan with a ₹5 lakh deductible. This is highly affordable and drastically increases your total protection.
- No Claim Bonus (NCB) Safeguards: Look for policies that offer 50% to 100% guaranteed NCB inflation protection or “super NCB” features, which automatically increase your sum insured every claim-free year.
- Restoration / Recharge Benefits: Opt for plans that automatically restore your sum insured up to 100% or unlimited times if you exhaust it during a single policy year or for multiple illnesses.
