How Air Quality Index May Decide City-Wise Premiums

A Brief Overview of AQI

AQI, or Air Quality Index, is a measurement that reveals the air pollution level in a particular city or area. AQI is determined by tracking various pollutants, including carbon monoxide, nitrogen dioxide, and ozone.

AQI becomes important for health insurance companies because many health experts believe that poor AQI value is related to several health concerns, such as cardiovascular diseases, asthma, etc.

Analysing the Link Between AQI and City-Wise Premium

Insurance companies decide health insurance premiums based on several factors such as age, gender, medical history, etc. In recent years, there have been talks of integrating AQI while calculating premiums to accurately price the risk. Let’s analyse the link between AQI and city-wise premium:

The Link Between AQI and Health Concerns

Poor AQI levels have been linked to health concerns by several health experts for many years now. Health conditions such as asthma, cardiovascular diseases, COPD, etc, are seen relatively higher in cities with poor AQI levels. In such situations, insurers are inclined to align the premiums with the risk exposure of individuals living in such cities.

Did You Know that the number of patients in New Delhi, with varying respiratory conditions, rose to almost 17 to 18% in the second half of 2024, as compared to 5 to 6% in the first half, simply because of the poor AQI level in the city? 1

Availability of Adequate Data

Unlike traditional methods of analysing available data to understand risk factors, insurers now rely on modern indicators that include AQI to conduct a specific risk assessment. This helps the insurer understand:

• Claim patterns across cities.
• Provide customised healthcare policies.

Did you know that health insurance companies divide the country into three broad zones based on similar factors to design city-wise policies, pricing models, and specialised plans?

Rising Healthcare Expenditure in Some Cities

The link between poor AQI and health concerns has been established by many health professionals. Such health concerns are often not considered short-term because they require lifelong treatment, expensive procedures, frequent hospitalisation and a lot more. This increases the claim frequency of insured individuals in cities with poor AQI levels. To balance the cost and risk factors, insurers are inclined towards formally including AQI as a factor in determining the premium.

What Can You Do?

If Indian insurers start including AQI while deciding the premium, insured individuals may face a substantial increase in the premium. While the AQI is not something in your control, here are some practical strategies that can help you find robust health insurance plans:

Compare and Explore Polices

Insurance companies are likely to weigh AQI on different parameters and levels. This is why exploring and comparing different policies becomes important to find an affordable plan with comprehensive coverage.

Does exploring policies seem daunting? Head straight to Jio Insurance Broking to explore and compare policies of different insurers under the same platform.

Maintain a Healthy Lifestyle

Even if you stay in a city with an AQI level, you can always benefit from maintaining a healthy lifestyle. The lower your exposure to health risk, the lower your premium.

Pro Tip: Use wearable fitness trackers to maintain a healthy track record, as many insurers evaluate such activities.

Consider Family Floater Polices

If you are considering purchasing health insurance for you and your loved ones, consider family floater policies rather than an individual plan. This may help you get adequate coverage at an affordable premium.

Looking for cost-effective protection? Consider choosing Top-Up/ Super Top-Up plans rather than simply increasing your base sum insured.

Closing Notes

With talks of integrating AQI in determining health insurance premiums surfacing strongly, insured individuals in poor AQI zones may expect some changes in their premiums and coverage. However, to curb any drastic changes, steps such as maintaining a healthy lifestyle and picking a plan smartly can help individuals. This can help strike a balance between getting adequate coverage and a cost-effective premium.

Rather than seeing this shift as a negative factor, it is best advice to explore what different insurers have to offer based on your health conditions, and the city you live in. Enter Jio Insurance Broking: A platform where you can compare and explore health insurance policies of different insurance providers to make an informed decision.