Health Insurance Premium: How it is Calculated?

TomorrowMakers ™

Health Insurance Premium: How it is Calculated?

17 April 2018
Various factors can affect your health premium. Here are the top five.

We live as if there is no end to our lives. It is a dream-like sequence that will never see the light of the day. Our health is not absolute or impenetrable, we have to take various precautions to ensure we remain hale and hearty.

We exercise, pray, eat organic, consult astrologers and do all kinds of things to prolong our lives. But while most of us pay attention to our health, very few think of health insurance. When our health fails us, or is affected in any way, this insurance comes into play and helps us cope with the high costs of medication and treatments. However, the level of cover you get to protect your health depends on your premium. And this cost can differ from one insurer to the next. Let’s understand how insurance companies calculate premium and the factors that can affect the premium rate.

Age

A primary factor that insurance companies look at when evaluating your premium is your age. The younger a person is, the less likely he/she is, to fall ill or contract a serious illness. This means the liability attached to younger people is not as high as compared to older individuals. Therefore, insurance companies charge younger people a lower premium.

Current Health Status

Apart from age, a person’s current health status can also determine the premium. For example, those who suffer from obesity or even smoke can be expected to shell out a higher premium for a health policy as they are more susceptible to severe medical conditions.

Pre-existing diseases

If you are diagnosed with a disease or illness before buying a health, most insurers will only cover them after a specified waiting period. Additionally, any complications that may arise from a pre-existing disease might not be covered. For example, a claim may not be approved for treating eye problems that might have a link to a pre-existing illness (diabetes). This might result in having to pay a slightly higher premium.

Location

Insurance companies tends to charge higher premiums for people living in big cities and metros as compared to those living in rural areas. This could be because urban areas tend to generate unhealthy lifestyles, and city dwellers are more susceptible to diseases than those from rural areas. Also, the healthcare expenses in metros are considerably high as compared to rural areas.

 

Tobacco habits

Consuming tobacco in various forms, whether smoking or chewing, will also affect your health insurance premium. It lowers the chances of availing comprehensive coverage at a lower rate of premium, because tobacco consumption can cause serious diseases, including critical illnesses such as cancer.

Closing Thought

These are the five major factors that can affect your health insurance premium. While you may have little control over specific factors, such as location and pre-existing conditions, you can still reduce your premium amount by staying healthy. Follow good lifestyle habits and pay attention to your fitness, and you will not only develop a healthy mind and body but will also benefit from lower premiums. 

 
 

MOST VIEWED CONTENT

6 Things You Didn't Check Before Buying Health Insurance

6 Things You Didn't Check Before Buying Health Insurance

From concealing medical history to ignoring the fine print of a policy, here are 6 common mistakes to avoid while buying health insurance.

How Mediclaim differs from a health insurance policy

How Mediclaim differs from a health insurance policy

Health insurance and mediclaim policy are two terms that often creates confusion, read this article to understand the difference between the two

Did you know your lifestyle could be contributing to kidney disease? [Infographic]

Did you know your lifestyle could be contributing to kidney disease? [Infographic]

Your current habits and lifestyle could be putting more stress on your kidneys than you think. Here's what you need to know.

Terminal illness benefit

Terminal illness benefit

A terminal illness is a rapidly advancing and incurable medical condition. When diagnosed with a terminal illness, there is no option but to resort to palliative care because the victim has a lowered life expectancy.

Health insurance for dummies: 6 essential questions and answers

Health insurance for dummies: 6 essential questions and answers

Taking the confusion out of Health Insurance, we have picked up the 6 most basic Health Insurance questions every policy holder must have the answer to.

Medical treatment in India - Can you really afford it? [Infographic]

Medical treatment in India - Can you really afford it? [Infographic]

Still haven't bought health insurance? Here is a close look at the financial burden you are risking if you don't.

Why should you opt for a family floater health plan?

Why should you opt for a family floater health plan?

When buying health insurance for you or a loved one, you have the option of buying individual policies or buying one single health policy that covers all of you. Here’s a close look at the latter, called Family Floater plans.

boy

We would love to hear from you!

Question, comment or concern? Our contact form is the best way to get in touch. We will respond to you within 5 working days.

NEWSLETTER