What are the factors affecting health insurance premium?

Posted on: Nov 29, 2021 | | Written by:

What are the factors affecting health insurance premium?

Published on November 29, 2021. EST READ TIME: 3 minutes

Currently, mankind is battling with problems like pollution, food adulteration, sedentary lifestyles,and of course, a host of diseases and infections. Which means, having a health insurance policy is a must, as it can financially protect you during medical emergencies. However, merely buying health insurance is not enough, choosing the right one is more crucial. It should cover your needs and seamlessly fit your budget too. That’s why it’s important to know the factors that affect health insurance premiums not only when you are buying the policy, but also when you are renewing it.

Factors affecting health insurance premium

Health insurance premium is the amount that the policyholder needs to pay to the insurer to keep the policy active and avail its many benefits. There are several factors that affect the premium of your health insurance, such as:

1. Age: This is, no doubt,one of the vital factors affecting health insurance premium. The older you get, the more premium you need to pay. This is because insurance companies consider older people as high risk because the chances of them falling sick is more compared to younger people. So, it’s advisable to buy health insurance with good coverage at a younger age.

2.Pre-existing medical condition: When you buy a health insurance, it is mandatory to declare any pre-existing diseases. Based on this, the insurer will assess the risk associated and charge the premium based on this risk. Such health insurance premium is usually more because you are more likely to get hospitalised and file claims. Some insurance companies may decide not to cover pre-existing diseases while some others may enforce a waiting periodto cover the pre-existing medical conditions. Some insurers may waive off the waiting period but charge a higher premium amount.

3.Family medical history: If certain ailments like diabetes, heart disease, blood pressure or cancer run in the family, then the likelihood of you contracting the disease is quite high. In such cases, the premium will be high as you are considered a risk by the insurance companies.

4.Gender: Sounds strange? Well, medical research has shown that women visit doctors more than men do, are prone to chronic diseases, and take prescription medicines. So, the premium rates for men and women are different.

5.Type of plan:Health insurance premium also depends on the type of plan that you choose. A family floater or group health insurance policy will have a lower premium when compared to individual health plans because in family floater or group plan, all members of the family are covered under the same sum insured. Similarly, if you take add-on covers, your premium will be higher.

6. Profession:Your place of work also decides the premium of your health plan. If you have a stressful job or you work in hazardous environments like construction sites, or places that see radiation, chemical abuse, pollution, etc., then you have to pay higher premium as the risk of developing cardiovascular and other life-threatening diseases is more. Factory workers are also charged high premium as they run the risk of getting injured. But those working in relatively safer environments pay less premiumbecause their chances of getting exposed to life-threatening disorders from work are lower.

7. Body mass index (BMI):If your BMI is more than normal, be ready to pay higher premium than those who have a normal BMI. The reason is simple - people with higher BMI are susceptible to diseases like diabetes, heart disorders, blood pressure, joint pains and others. They need regular medical attention, and hence,their probability of filing claims is more.

8. Policy duration:Health insurance premium goes up every year at the time of renewal, so take a policy with a longer tenure and the premium will be less.

9. Marital status:It’s believed that married couples live longer and healthier lives and so the premium rates for married people are generally lower.

10. Sum insured:Sum insured is the amount that you can claim from your insurer in case of a medical emergency. The higher the sum insured, higher will be the premium. So, you should decide the sum insured of your health insurance plan based on your needs and budget. However, if you increase the sum insured a couple of years after purchasing the policy, the premium will not increase proportionately but there would be an incremental increase.

Conclusion

Health insurance offers financial support in case of a medical emergency and it is a must-have if you don’t want your finances to go for a toss. Just make sure you understand the above factors that affect health insurance premium and then choose a policy that fits your needs and pocket.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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