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Know the Factors Affecting Your Health Insurance Premiums
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Know the Factors Affecting Your Health Insurance Premiums

Over the past few years, the sky-high cost of medical inflation has motivated everyone to purchase health insurance policies that will help them choose the best treatment even in healthcare inflation and safeguard their savings. This pernicious COVID-19 pandemic has forced people to buy beyond individual health insurance plans. So, these days, people are buying floater policies to ensure they have a financial cushion in case of a healthcare emergency like the COVID-19. While approving your insurance application, health insurance companies evaluate your health profile utterly. Based on their assessment, they usually decide on your health insurance premium charges.

While purchasing a health insurance policy plan, a person should be aware of the factors that can affect his/her medical insurance premium.

Factors Affecting Health Insurance Premium

  1. Age
  2. Medical history
  3. Choice of profession
  4. Policy duration
  5. Body Mass Index (BMI)
  6. Smoking habits
  7. Geographical location
  8. The type of plan you selected
  9. Coinsurance/ Copay feature
  10. Gender
  11. Marital Status

While deciding the premium cost, every insurance company follows specific guidelines. Here we are going to mention the list of things that they consider while deciding health insurance premium costs.

  • Age

This is the pivotal factor that plays an imperative role in your premium amount. Insurance companies usually abide by the rule of thumb, i.e., the higher the age, the higher the premium. This is because older people are more susceptible to various illnesses than youngsters. Young people are not prone to various diseases, and thus, they hardly visit a doctor. So, experts always advise you to purchase health insurance policies when you are young. You would get comprehensive coverage along with a spectrum of benefits at an affordable premium if you bought a policy at a young age. To enjoy low premium health insurance, always purchase a policy as soon as possible.

  • Medical history

Your past healthcare records will also contribute a lot while deciding the premium amount for your policy. For example, suppose you have a family history of critical illnesses like heart diseases, cancer, or any other or have a pre-existing disease. In that case, your premium will be on the higher side. On the other hand, if you are not suffering from any illness and have maintained a healthy lifestyle, your premium will be lesser and never burn your pocket.

  • Choice of profession

Your occupation and the amount of risk that you are experiencing in your working environment will also affect the premium charges. For example, if you need to work with hazardous substances, radiation, chemicals, and your job involves a lot of injuries like construction, then you need to pay higher premiums for your health insurance policies. Because insurance companies think that these people are more susceptible to the risk of cardiovascular diseases. On the other hand, your premium will be much lower if you work in a school or office.

  • Policy duration

The tenure of the policy also plays a significant role in your health insurance premium. If you choose a policy with a longer duration, the premium amount will be affordable. But if you choose a policy with a shorter duration, you need to pay higher premiums.

  • Body Mass Index (BMI)

People, who have high BMI, need to pay a higher premium rate than those with normal BMI. This is because these people are more prone to various diseases such as heart problems, joint problems, diabetes, to name a few. In addition, these people often need specialized treatment and care for normal procedures like pregnancy. Thus, it makes a simple process a tiresome and intricate one. Therefore, this will automatically increase your premium rate.

  • Smoking habits

According to the report published in the Lancet, India has about 11.2% of the total smokers in the world. Smoking or chewing tobacco enhances health risks, and health insurers consider these smokers as high-risk insurance buyers. Thus, companies usually charge high premiums from these customers. Some insurance companies even refuse to offer insurance policies to these buyers. Inevitably, people who smoke need to pay high premiums as compared to non-smokers.

  • Geographical location

The location where you stay plays a vital role in your health insurance premium. Unfortunately, the premium rates are on the higher side for some geographic locations because of the shortage of wholesome food options, weather, and health issues.

  • The type of plan you selected

Your health insurance premium amount will also depend on the type of policy plan you have selected. The premium for a group health insurance policy is lower as compared to an individual policy. Moreover, if you want to incorporate add-on covers like riders, your premium will increase. Individual or group insurance has a low premium rate, while family floater has a high premium rate. But different health insurance companies have different terms and conditions.

  • Coinsurance/ Copay feature

While opting for a health insurance policy, if you select a co-payment option, your premium will be less. Under the copay clause, you need to pay a particular portion of the claim from your end. The insurance company will settle the remaining amount. This step strikingly lessens the premium amount.

  • Gender

Many health insurance companies set a different premium rate for men and women. According to the experts, the three prime reasons are

    • Women often visit doctors or physicians for their health conditions
    • They consume a lot of medications as per the prescriptions
    • They are prone to more chronic diseases
  • Marital status

Though there is no scientific evidence whether married people live longer and healthier lives or not still, for them, health insurance premiums are lower in rates. The men generally reap better benefits with this status change.

No insurance yet

If you don’t have any health insurance policy, the insurance company used to charge a higher premium rate for your policy. Because the company believes that these uninsured people need to visit doctors or hospitals frequently to enjoy the benefits of the health insurance policy. Therefore, the company should charge a higher premium to cover all expenses.

After evaluating all the above factors, the insurance company uses the health insurance calculator to calculate the final premium amount for your health insurance policy. By using an online insurance premium calculator, you can also estimate the premium against your policy.

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