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How to use Mediclaim Policy Premium Calculator to Calculate Premium?

India’s healthcare inflation has been rising rapidly; almost at twice the rate of overall headline inflation. A rise in inflation here implies an increase in medical and healthcare costs. With the advancement in medical technology, the cure to some of the most dreaded diseases is quicker and accessible. At the same time, it comes at a much steeper cost. With rising medical costs, Health insurance seems to be the most efficient and effective way to mitigate this risk and secure the financial future of your family. 

There is widespread competition in the Insurance space in India with private players participating in this race as well. Therefore, there are a plethora of varied yet closely comparable policies at our disposal, making our choice for a health insurance plan even more complicated. Therefore, due diligence is a must for selecting the right Mediclaim policy. One of the most critical elements of any insurance plan is the cost or the premium payable. It is essential to understand the economics and the math behind the calculation of the premium amount.

What is Health Insurance Premium Calculator?

There is nothing in this world which doesn’t have an alternative. Same is the case with a health insurance premium calculator. Manual calculation of Mediclaim policy premium which is a tedious task was overcome by an online premium calculation tool. It is a time-saving tool available at your convenience, helping you to compare several policies based on your requirement. It lays out before you the price estimation of health insurance you can consider to purchase. At a time when health insurance has almost become a necessity, health insurance premium calculator makes your work streamlined and a lot more objective. The calculator also provides you with research on various factors like risks, exclusions, writing period, co-payment obligations etc.

How to use Premium Calculator?

For using one of the most straightforward tools to calculate the premium, you have to provide personal details like date of birth, past medical history contact details, along with the details of your family for whom you want to purchase the policy. You are also asked the sum that you want to get assured for.

Based on your information and preferences, the policy premium calculator lists all the Mediclaim policies ideal for you in a predetermined order of priority. Mediclaim policy premium calculator presents before you an estimate of the premium along with its free quotes. Again, proper research and satisfaction are pre-requisites before the selection of the Mediclaim policy premium. 

Why Premium Calculator?

Generally, people believe hearsays or suggestions given by the insurance provider while deciding the amount of premium well in advance.

There are some reasons why the Mediclaim Policy Premium Calculator is needed –

  • Time-saving and cost-efficient – Mediclaim Policy Premium Calculator makes the tedious task of premium calculation much more acceptable and simple, resulting in saving cost that you might incur to get expert advice.
  • Crystal clarity – Transparency and making you aware well in advance about the policies available at your disposal provides a crystal clear image of the Mediclaim policy suited to your financial appetite. 
  • Financial planning– You can plan your finances well in advance using the Mediclaim Policy Premium Calculator, which tells you about the premium amount and helps you in the process of price estimation. In short; it allows you to scientifically plan your future.
  • Independent decision making – By providing you with the knowledge of Mediclaim policies and its premium makes you independent in making rational decisions and selecting the ideal Mediclaim policy along with the premium that you can afford.
Source: Infographic on Health Insurance Premium Calculator

Inputs to Premium Calculator

The calculation of premium depends on a number of factors. Here we discuss some of the important factors for better understanding and clarity behind the Math. 

  • Age – With advancing age, a person becomes more prone to illnesses and other diseases, increasing the amount of your premium. Therefore, age plays a vital role in the premium calculation.
  • Sum assured – Naturally, higher the sum assured, higher would be the cost of the policy. The premium is directly proportional to the policy cover. That is because the insurance company is undertaking or underwriting a risk on your behalf by providing higher coverage. Therefore, they will demand a higher premium to justify the increased risk. 
  • Medical history – Before you avail the Mediclaim policy a complete medical check-up is done, to ensure that you don’t possess any prior disease, or you don’t have any harmful habits like drinking or smoking. Your premium is skewed based on your medical history and the health check report.
  • Savings and investments – The insurance company invests a significant part of the premium received. All these investments have to comply with the regulations of IRDA (Insurance Regulatory and Development Authority). Some insurance companies pass on the benefit of income received from the assets and thereby, reducing the premium costs. This is partly also because of the heavy competition in the insurance space. The calculation of premium is subject to the return from the investment, so you have a choice of what investment mix you want to choose.
  • Policy underwriting – Risk analysis and a background check are an essential factor before making any financial decision. The premium for Mediclaim policy also depends on how risky is the policyholder for medical assurance, based on the medical reports and information.
  • Mortality rate – Premium amount also depends on the mortality rate of the person concerned. The mortality rate varies directly with the age of the person, i.e., risk of uncertainty increases with advancing age, thereby, increasing the risk of the insurance company.    
  • Base rating – the policy provider sorts different people into a particular set of people processing similar kind of characteristics; it may be age, gender, profession, family, size or geographically. After bucketing the insured into a relatively homogenous group, the insurer sets a base rate accordingly.

What are the benefits of a premium calculator?

  • Helps you to choose the best amongst the available policies- Rational approach based on a comparison between similar policies and estimation of premium before purchasing of policy allows you to select the best and most efficient Mediclaim policy.
  • Streamlining the process – Mediclaim Policy Premium Calculator makes a cumbersome task easier for two main reasons. Firstly, you can filter out various quotations according to your preferences. Secondly, it saves your time which would have been wasted in the actual meeting with the agent.
  • Requirement fulfillment – Filtration and sorting of Mediclaim policy according to your preferences and risk appetite assures you that Mediclaim Policy Premium Calculator fulfils your requirement, in a way that is both suitable and affordable to you.
  • Add-on coverage – Policy provider provides you with various add-on cover, but you have the option whether to include or exclude such add-ons. This add-on coverage eventually increases your premium amount.
  • Tax-benefits – One of the significant reliefs for you as a policyholder is the tax deduction benefit under section 80D of the Income Tax Act, 1961. But this tax benefit depends upon the way premium is paid. You can avail tax exemptions totaling up to Rs.1 lakh per annum.

Mediclaim Policy Premium Calculator

Does the premium for health insurance policies vary from one insurance provider to another?

Yes, the premium payable for health insurance policies can vary from insurance provider to another. Return of investment is the most apparent difference that you can spot between two insurance providing companies. Since the estimation of values can never be absolute, you can say that health insurance premiums can vary.

What is the significance of a term plan premium calculator?

The term plan becomes significant in case you need high insurance but with a lower premium. It's also required for business people who are having a considerable turnover in business. If anything happens to them, their family should never become bankrupt. Hence, they need to take a term plan equal to that of their turnover.

Why does health insurance renewable policy depend on various factors?

Insurance renewal is when one goes for a continuation of a policy for an extended period. By paying the renewal fee/premium, you can renew the policy. They also have an option to increase the sum insured, though followed by a series of tests and the history of claims. Age plays an important role during the renewal process. As described earlier, aged people are more prone to diseases as compared to young ones. So, it becomes a requisite for older adults to have a Mediclaim policy. Therefore, the insurance company must possess a sound renewal policy to make people persuaded, opting for their policy.

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