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Planning to Buy Health Insurance? The Premium Calculator is Here to Help.

Gone are the days when insurance was considered a luxury, non-essential or purely an investment vehicle intended with the sole purpose of saving tax. Today, insurance has become a necessity, especially health insurance. We want things to go well. But we never know what will happen in future. So, we need to get prepared for it. Buying a health insurance would be one way. It saves you from those extraordinary expenses that you have never even  thought of. So, let’s see what exactly it is.

Medical expenses is growing at a rapid rate. It requires separate budgeting so that we meet it without difficulty. Our lifestyle is adding pressure to this requirement and forcing us to set aside more money. Any expense can be postponed. But spending on a surgery or doing something about your illnesses? Can you even think of postponing such events? 

This is where health insurance helps. Any unforeseen events? Spend for it. Get the bills. Submit to the insurance company and they will reimburse it. It generally covers pre- and post-hospitalization, consultation, medicines, health tests, surgery, day care, room rent etc. Better still; if you have a cashless facility, then you don’t even worry about putting up the upfront cash.

The insurance company is ready to give money whenever you ask. But would they do that free of cost? Obviously not! So, you should pay them an amount periodically for the risk they are taking. It can be every month, once in four months or even once a year. The amount you pay also varies. If you are in your 20s, healthy and fit, your premium would be less. But, aged persons with chronic illnesses would have to pay more. That amount is called Insurance Premium and it is the price you pay the insurance company for underwriting the risk.

Before you even start the selection of the ideal insurance policy, it is essential that you do your homework, make comparisons and zero in on the policy that suits you best.

If you know the premium that you are required to pay, then you can 

  1. Question the insurance agent if he is selling you wrong policies or ones with higher premiums – It is very common for agents to recommend unsuitable policies to targets simply to get more commission or premium. You don’t have to depend on the agent for his knowledge when you know the right premium for you.
  1. Compare policies of different companies and choose the best – Some insurance companies may offer same features and add-ons as other with a lower premium. 
  1. Plan your budget even before you buy a policy – By buying an insurance you commit yourself to pay periodically in future, and this is a long-term commitment. You might run out of cash if you don’t plan for such events.

It saves your time and energy. There are hundreds of policies offered online and offline. With the help of calculators, we can filter them and concentrate only on those policies that bests suits our needs. Remember, you should not choose a policy just because the premium is low. It may not cover some important expenses or they might have other disadvantages.

How to calculate health insurance premium?

There is a comprehensive method to calculate it and doing it manually would kill your time. That is why you need a premium calculator. Every insurance company has their own premium calculator. All you need to do is input the following details in the calculator and get the magic number! The factors and how they affect the premium you pay is given below

  1. Policy plan – The plan with greater features and add-ons will require a higher premium.
  2. Policy term – If the time period is high and large sum is covered, premium will be higher. 
  3. Number of members to be covered in this policy – Family plan is generally considered better than individual plan.
  4. Age – It plays a very important role in determining premium. Higher the age, higher your premium. 
  5. Gender – Males have greater chances of having cardiac or other major problems than females. 
  6. Any medications/ pre-existing illnesses – Someone with diabetes or cardiac problems have higher chances of falling ill and claiming for reimbursement. Thus, the premium in such cases will be higher. 
  7. Lifestyle(Smoker/alcoholic) -People with poor lifestyle habits have greater chances of falling ill and are normally charged higher premiums. 
  8. City and place of residence

The above are important factors that determine the amount you pay. Simply put, if the risk they take is high, the premium will also be high. The website may ask for more details if needed. 

Enter the details. Compare the policies offered  by different companies and choose the one that best meets your needs. Policies can be bought online but even after this, if you need guidance, only then, you must connect with an agent. Make sure that you are aware of the technical jargons they use and do not blindly take those policies suggested by them. Your research will help you find inexpensive plan and will also have adequate coverages. 

General tips for choosing the right insurance plan.

  1. Know the coverage and exclusions of the plan – It is essential to know what kind of expenses is covered in the plan. Health insurers don’t generally cover expenses on cosmetic surgeries, drug-use etc.
  1. Claim process – Different companies have different procedures. Find the one which clears the bills faster.
  1. Ensure that the premium falls within your budget. You have to prepare for future, but not at the cost of your present.
  1. High claim settlement ratio – If your insurer has reimbursed majority of the claims received by him, there are high chances that even your claim would be reimbursed fully.
  1. Do consider top-up plans – We can never predict the exact amount required in future. There is high chance that your expenses may exceed the deductible threshold limit (i.e.) the maximum amount that the insurance company will reimburse. In such cases, top-up plans will be of great use. If your expenses exceed by Rs.50,000 the top plan will help recover even that amount. 
  1. Look at network hospitals – Every insurance company has their own network of hospitals and you can ensure cashless transactions if you go to those hospitals. So, choose an insurer with a wider and more expansive network of hospitals.
  1. Buy online – It is better to buy online than to visit any agent as it would reduce all the extra marketing, administrative costs and commissions to the intermediary.

How can I reduce the premium amount I pay?

  1. Once you enter the details, you can compare various plans offered under your selection criteria. Comparison helps to determine the lowest premium while not compromising on the add-ons you are looking for.
  1. Some general suggestions would be that you opt for your entire family rather than individual plan as the latter is costlier. They are called as family-floater plans. 
  1. Buy a plan at a young age. You fall under the category of young and healthy and thus the premium is a lot less.
  1. Opt for deductibles. If you think you are financially strong to cover a certain amount any time in future, do opt for deductibles so that the premium you need to pay is lesser.
  1. No Claim Bonus – If you haven’t claimed for any reimbursements the previous year, the insurance company will give you a bonus in the form of higher coverage. Ensure the the plan you choose has that NCB option.

Life will put you in situations that you would never have imagined of. Insurances will act as a cushion and reduce the adverse effect. Do your research. Choose the best plan. Lead a happy life.

Health Insurance terms to be aware of:

  1. Waiting Period –  It is the time for which you should wait to claim reimbursement for your claims. Choose the plan with shorter waiting period.
  1. Survival Period – The insure should survive for at least 30 days after being diagnosed with an illness so that the expenses can be claimed.
  1. Grace period – Insurance premium should be paid before the due date to keep it active. Insurers may sometime offer extra time to pay the premium and this extra time is called grace period. Once the grace period is crossed, the policy can become inactive and you tend to lose all benefits.


Does low premium mean low insurance cover?

Low premium does not necessarily mean low coverage. When you compare different policies, you will find that one would offer the same set of features at a lower rate. Ideally, you must opt for such schemes.

Can I avail any tax benefits on the premium amount?

Yes. Tax benefits are offered under section 80D of the Income Tax Act, 1961. The premium amount is tax deductible up to a certain limit. This limit depends on the number of people covered in the plan and if there is someone above the age of 60. If your parents are above 60 years, the deductible limit is higher as you will be paying a higher premium.

Where can I find the premium calculator?

Every insurance company has a premium calculator on their website. The most popular ones being Policy bazaar and Insurancedheko websites. You can even try out the calculators of more than one website to have a better idea. Ideally prefer the neutral syndicators as they do not have an axe to grind in terms of closing sales.

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