health insurance

7 Factors That Affect Your Health Insurance Premium  

Health Insurance

Health insurance safeguards you from the burden of financial stress due to unforeseen medical emergencies by providing you with much-needed financial cover. Medical technology has been advancing each year with the inventions of new surgical techniques and healthcare avenues, resulting in a steadfast increase in the cost of healthcare in our country. There has been a rise in lifestyle diseases in the past few years and seeking medical treatment for them may deplete your savings which is why having a health insurance policy has become more than a necessity.

Even though most of the health risks are unpredictable and may come to notice in unexpected ways, some medical events alert you beforehand for you to prepare financially now. That is where you can make use of a health insurance policy.

A health insurance policy offers protective coverage and a host of other benefits that pay for medical expenses incurred by the policyholder. When you make a claim, the health insurance provider directly pays for your medical treatments with cashless insurance benefits or reimburses you for expenses incurred from illness, injury etc. There are several types of health insurance plans, such as individual health insurance, family floater health insurance, critical illness cover, etc. Buying health insurance can be an essential investment and a crucial part of your financial planning.

Health insurance provides you with essential financial support in times of unforeseen medical circumstances, but it is considered an expensive undertaking. The health insurance premium does not cost the same for all individuals, and many factors affect changes in the price of premiums. Even though there are many affordable options in health insurance policies, many people seem to be unaware of them. While the government is trying to focus on various health schemes and initiatives such as Ayushman Bharat Yojana, and capital expenditure towards healthcare, the awareness about the importance of health insurance may increase exponentially in the future.

What is a health insurance premium?

A health insurance premium is an amount paid by the policyholder to the insurance company to buy a health insurance policy and enjoy the policy benefits. The specific amount of money is paid periodically to the insurance provider to avail the benefits such as medical coverage, cashless payment facilities at network hospitals, pre-and post-hospitalization expenses, among other promised facilities. Apart from getting the medical benefits, the premium is also paid to keep the health insurance policy functional and operational.

Many reasons may affect the amount of health insurance premium paid by the insured, and it may vary from insurer to insurer and from customer to customer.

Here are some of the key factors that affect the health insurance premium you will be required to pay in India: 1.

1. Age:

One of the most crucial factors that affect the amount of health insurance premium is the age of the insured. Most insurance providers go by the rule of thumb – the higher the age, the higher the premium. Young people have fewer health conditions and lower health risks compared to older people. People in later stages of life are more likely to develop a health condition as they grow old and are most likely to require medical assistance and coverage.

Hence, it is highly advisable to buy health insurance policies with good coverage at a younger age.

2. Pre-existing medical condition:

Health insurance premium for individuals with a pre-existing medical condition is likely to be high, as the cover extends over the pre-existing condition as well. While choosing a health insurance policy that fits your requirement, it is absolutely compulsory to highlight certain pre-existing conditions while submitting your health records. If you had certain health issues in the past, then it is up to the insurer to allow it in or decide not to allow it in their policies. If the insurance company does not bear to cover a certain condition in the policy, then the policyholder must bear the cost of treatment for that condition. It eventually affects or increases the amount of premium.

 

3. BMI or Body Mass Index:

An individual with a higher body mass (BMI) may have to pay a significantly higher amount of premium than people with normal BMI. People with higher BMI are more susceptible to various medical conditions like diabetes, high or low blood pressure, heart conditions, joint pains etc. Such ailments may require regular or frequent visits to doctors than those unaffected by them. Hence the premium amount increases or decreases directly depending on one’s body mass.

4. Habits and Lifestyle:

Adverse lifestyle changes directly affect the premium rates of health insurance policies. Most health insurance providers increase their premium rates for their insurance plans for people who have the habit of smoking, drinking, chewing tobacco or snuff as they become more vulnerable to heart, liver, lungs, and other types of disorders. Hence premium rates are higher in these cases than for those who do not indulge in them.

 

5. Family medical history: 

If the family of the insured have had certain medical conditions, there is a likely chance that their premium rates may be higher than others. Some genetic conditions are bound to transfer from parents to their children, and no one can do anything about it. If illnesses such as heart disease, cancer, or diabetes are prevalent in your family’s medical history, then that puts you at certain risk too, which increases the premium rates of health insurance.

6. Occupation:

The occupation or area of work of the policyholder may affect the premium rate of the health insurance policy. If the policyholder works in an environment exposed to hazardous substances, radiation, chemicals, or an environment with a high risk of injuries like constructions, might end up paying higher premiums as per the criteria of the insurance provider, as there is a high possibility to contract various ailments due to exposure to hazardous materials.

7. The Type of Plan:

The premium rate for the health insurance policy may vary depending on the type of health insurance coverage you buy. A family floater health insurance policy has a higher premium as compared to an individual health plan. Also, extending the benefits of the health insurance plan with the help of add-on covers may affect your premium rates.

The above factors that affect the premium of a health insurance policy may help you choose the right insurance plan for you. A health insurance policy is a fundamental requirement in today’s world, with changing lifestyles and the increasing cost of healthcare. Hence, it becomes important to protect yourself and your loved ones from any unlikely event that could leave you financially drained. To safeguard your future, it is advisable to invest in a health insurance policy that would offer you comprehensive coverage and various benefits to ensure your financial security.

 

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