11 Factors to Keep in Mind While Calculating Health Insurance Premium In India
Amid the ongoing coronavirus (COVID-19) outbreak in India, health insurance is one of the most crucial investments one can make today. Unforeseen circumstances in life and deteriorating lifestyle choices only validate this claim.
But how much are we actually informed about our health insurance plans, apart from the basic inclusions and exclusions under it?
You must know that the health insurance premiums paid by you are not the same as for everyone else. You may be paying a higher amount than others based on a few factors.
Shouldn’t you know-how is health insurance premium calculated?
Knowledge is power in this case. You must know about the factors that affect your health insurance premium as it can be a trump card in making the most out of the amount you pay as premiums.
Learn in-depth about the factors because of which you may be paying a higher premium for your health insurance policy:
1. Age and Gender: Every health insurance company looks at your age band and gender. Most health insurance premiums increase with age. This means, the younger you are, the better the time it is to get yourself insured. Usually, people aged above 40 years are charged with a higher premium. This is because as people age, they are at a higher risk of making health insurance claims owing to health issues.
Health insurance premiums differ with gender too. Women are more likely to seek medical attention between 19-55 years of age. Whereas men are more prone to accidents. So, you are charged health insurance premiums considering these factors.
2. Type of policy: Your health insurance premium depends on the type of policy you buy. It can be on a family floater basis, or an individual basis, or group health insurance plan. The premiums vary if you buy a personal accident policy, or a critical illness insurance policy, or a disease-specific health insurance plan.
For instance, buying individual health insurance coverage is advised in case where you have a family history or if one of your family members has an adverse health condition.
Health insurance premiums also vary with the type of variant you choose in a certain policy.
For instance, say a health insurance plan is available in 5 different variants. All the variants may vary in terms of sum insured range and benefits offered. Your premium will be higher if you opt for a plan with the most benefits.
3. Pre-existing diseases: People with pre-existing diseases are required to pay a higher premium amount as they are more likely to file a claim as compared to others.
Though most health insurance companies ask the policyholders to serve a waiting period for pre-existing diseases, still the policy buyers have to pay a little extra premium for the same.
4. Family’s medical history: Medical history is one of the major factors that health insurance providers consider while calculating premiums. But unfortunately, you cannot control your genes. And if someone in your family is suffering from diseases like Diabetes, heart diseases, Cancer, Thyroid, etc., then you are at a higher risk of getting affected with the same.
So, the insurer will ask you about your and your family’s history and then decide health insurance premium accordingly. You are likely to pay higher if your family doesn’t have a good medical history.
5. Lifestyle: Lifestyle habits such as smoking regularly or consuming alcohol daily affects the health insurance premium you pay. Some health insurance providers may even deny you health insurance products considering the ill-effects of them, while others compensate for it simply by asking for higher insurance premiums.
6. Location: Many health insurance companies base their premiums on the location where the policy buyer stays. Insurance companies believe that factors like climate, availability of healthy food options, hygiene, cost of medical expenses, sanitation, cultural aversion to exercise have an impact on an individual’s health which makes them charge higher premiums from them.
7. Use online premium calculator: The above-mentioned factors have a great impact on your health insurance premium. So, it is justified if you want to get an estimate of the premium of the shortlisted health insurance plan before you actually buy it. Use a health insurance premium calculator online to get an estimate premum amount.
With a health insurance premium calculator, you can take an informed decision and plan your finances better. InsuranceDekho allows you to use health insurance premium calculator on their website.
8. Sum insured range: Higher the sum insured, higher will be the health insurance premium for your shortlisted plan. But one should not choose health insurance policy based on low premium. Always address the sum insured limit considering the future expenses of healthcare.
9. Add-on covers: The level of coverage plays a big role in how much premium you will pay. Standard health insurance plans do not offer cover for, let’s say, maternity and postnatal care expenses, out-patient expenses, personal accident expenses, or benefits like super-top-up, daily hospital cash, etc. With an Add-on, you can cover them.
Add-ons are additional features like these that the policy buyers can purchase as a top-up to enhance coverage. Although premiums for add-on benefits are low and they are not heavy on pockets, but the benefits that you can accrue are limited.
Therefore, the policy buyers must make sure to only opt for add-on benefits when it is utmost required.
Also, make sure you go through the caveats before buying them, as bundling extra benefits not majorly, but increase health insurance premiums pertaining to extra coverage.
10. Family size: On a family floater basis, more than one member of the family can be covered under a single sum insured. Usually, health insurance companies cover two adults and two kids on a family floater basis. Some may even cover 6 or 8 members where 2 kids and 4 and 6 adults are covered respectively. A small family of, let’s say 2 members pay lesser premium than a large family of let’s say, 6 members.
But if you purchase an individual health insurance plan in the name of each individual, then the premium to be paid will depend on every individual’s age and respective sum insured.
11. Body Mass Index (BMI): BMI is a measure of body fat that depends on the height and weight of adult men and women. The results of BMI measurement gives a fair idea about if an individual is underweight, has a healthy weight, excess weight, or is obese.
BMI is measured because people with a higher rate of BMI are more prone to ailments like heart disease, diabetes, joint problems, to name a few. This is why, they may need specialised treatment in the future for normal procedures like pregnancy, thereby making even simple procedures tedious.
Therefore, health insurance premiums are high for people with a higher Body Mass Index. These are the 11 factors you should consider when calculating health insurance premiums.