10 Factors that Impact Health Insurance Premium

 

The rising cost of medical treatment is concerning. That’s why buying comprehensive health insurance ensures a financial cushion for your family in an emergency, which is a good idea. Notably, medical insurance covers you during difficult times and provides tax benefits.

Read on to learn about medical health insurance and the factors that affect the premium of health insurance plans in India.

 

Why is Health Insurance Important?

 

Health insurance covers medical and surgical expenses for an insured individual. It reimburses expenses incurred due to illness or injury or pays the care provider/network hospital directly (cashless claim).

 

Here are some other reasons for buying medical health insurance:

 

1. Safeguards finances against ever-rising medical costs
2. Covers critical illnesses or lifestyle-related diseases at an additional cost
3. Premiums are eligible for tax deductions under Section 80D of the Income Tax Act, 1961

 

Factors Affecting Health Insurance Premium

 

Let’s dive deeper to learn about the factors that impact the premium of health insurance policies in India.

 

1.     Age

Older people are at a higher risk of suffering from illnesses than youngsters. That is why insurance providers charge them higher premiums. Considering this, it is suggested that they buy a comprehensive medical coverage policy at a younger age in order to avail themselves of better benefits at an affordable premium.

 

2.     Medical History

Your premium will be higher if you have a history of suffering from illnesses. However, your premium amount will be comparatively lower if you have had no illness and have a relatively healthy life.

 

3.     Occupation

The nature of the work and the risk involved also affect the premium insurance providers charge. For instance, your premium will be high if you work on a construction site or a factory where the risk of injury is high.

 

4.     Policy Term

The duration of your medical insurance also plays a vital role in deciding the premium amount. If you choose a health coverage policy with a longer duration, then your premium will be less.

 

5.     Geographical Location

Medical expenses for cities like Delhi and Mumbai will always be higher than those of smaller cities. Considering this, the premium amount will also be higher. Notably, it is essential to declare the city you live in whether you buy health insurance online or offline.

 

6.     Pre-existing Illness

The risk of hospitalisation and medical expenses increases if you have a pre-existing illness. This will increase your premium. Also, some insurance providers may add a waiting period or a co-payment condition.

 

7.     Body Mass Index

People with high BMI are considered to be at risk of serious ailments like heart diseases, breathing problems, type 2 diabetes, high blood pressure and cancer. Owing to this, insurers charge higher premiums.

 

8.     Smoking Habits

Insurance providers view smokers as high-risk insurance buyers because smoking increases health risks. That is why smokers end up paying high premiums as compared to non-smokers.

 

9.     Type of Plan

An individual medical policy premium is always higher than a group health insurance policy. Purchasing add-on covers also increase the premium amount.

 

10.   Co-insurance Feature

The premium for policies with a co-insurance clause is comparatively lower because you will pay a specific portion of the claim in case of a medical emergency. At the same time, the insurance company will give the rest.

 

Types of Health Insurance

 

The following are the types of health insurance plans available in India:

 

1. Individual health insurance: Covers an individual separately
2. Family floater health insurance: It is a family health insurance plan that covers your family members under a single policy, and everybody shares the sum insured amount
3. Senior citizens health insurance: Designed to cover the medical needs and requirements of senior citizens
4. Critical illness insurance: Can be purchased as an add-on with the regular health insurance plan or as a separate plan
5. Group health insurance: Purchased by a group manager for a large number of individuals

 

All in all, it is important to buy a health insurance policy that meets your needs. It is also vital to know the factors, like smoking, pre-existing illnesses, and a co-insurance clause, that impact the premium amount of your medical insurance.