25/04/2024
Let's say Mr. Roy purchased a health insurance policy with the "Lock the Clock" feature at the age of 35 in August 2023. The for his health insurance policy is Rs. 12,000 at the time of purchase. Consider if the premium increases by 5% yearly per the current medical inflation rates.
For the first five years of holding the policy, Mr. Roy enjoys good health and does not need to make any claims. Now, with the 'Lock the Clock' feature, his age will be locked at 35. This means that the premium will increase as per the chart for a 35-year-old in the subsequent years, in August 2024, the premium will increase to Rs. 12,600, to 13200 in 2025, and so on, for a 35-year-old.
Now, if Mr. Roy's policy did not have the lock-the-clock feature, the premium would have increased as per the premium chart for a 36-year-old, 37-year-old, 38-year-old, and so on.
This feature thus provides significant cost savings to Mr. Roy over the years. He can continue enjoying insurance coverage without worrying about escalating premium costs as he ages.
An important caveat here, lock the clock means that your age is locked for premium calculation purposes. Every 2-3 years, insurance companies also may increase prices to adjust for medical inflation, which means you premium will increase if the premium for that age increases, even if there is no claim.
