Factors Influencing Health Insurance Premiums: What You Need to Know

Health care expenses are spiraling day by day. In modern India, a health insurance plan has indeed become more of a need than a luxury. Not to forget that it actually is a financial shield, saving you from the burden of medical bills due to any mishap, for example, hospitalization or falling ill. But as new and established insurance companies alike pitch all manner of health insurance plans, at least one question seems to keep arising: Which is best, and how much is it going to cost me?

It doesn’t matter; we are there to help you. Various factors have a bearing on health insurance premiums in India, thus providing you with three sources to make an empowered decision while choosing a health insurance plan. You will be able to compare plans with purpose and choose the best health insurance policy that works well for you and your pocket.

Health Insurance Premiums

A health insurance premium may simply be put in the same league with the price a person is to pay in regards to a linsurance company on a monthly or annual basis in order to receive coverage. Such coverage assures one of compensation up to a pre-determined limit whenever the individual falls ill or needs admission into a hospital for due reasons. Your premium is likely, in most cases, to dictate just how comprehensive your cover turns out to be.

Factors Affecting Your Health Insurance Premium

The health insurance premium depends upon a various factors. Let us discuss some of the most important ones:

• Age:

  In general, premium rates for health insurance are charged on a lower rate for the younger age group in comparison to older people. This is because, with an increase in age, the risk for hospitalization and the associated medical cost increases.

• Your Health Status:

  If you enjoy the best premiums; then your pre-existing conditions, if any, may lead you into hefty premiums, as the company estimates probability.

• Your Lifestyle:

  Such habits as smoking or using tobacco will raise your premiums in a huge way. This is because such activities are dangerous to your health status.

• Sum Insured:

  This is the maximum amount that an insurance company is inclined to pay toward any treatment expenses. Quite normally, the higher the sum insured, the higher the premium, which in turn should ensure adequate coverage.

• Your Policy Coverage:

  The premium will be less for a basic policy with restricted coverage as compared to comprehensive policies covering a wide scope of benefits, including pre- and post-hospitalization expenses or critical illness cover.

• Your Location:

  Geographical location may have an impact on your medical costs; it differs by city or region. So in case you reside in a metro city with higher healthcare costs, your premium may turn out a bit on the higher side.

• Claim History:

  A history of regular claims often makes insurance companies take it as an indicator to place you at an above-average risk, for which they might go ahead and increase the premium upon renewal.

Cost vs. Coverage: The Trade-Off

The more competitive premium may be inviting, but here is a trade-off between cost and cover: one with a low enough premium in a basic plan will not give any significant coverage against serious medical conditions that might demand high-cost treatment.

Tips for Managing Your Health Insurance Premium

Here are some extra pointers to keep your health insurance premium in check:

• Assess your medical requirements and select a plan that provides sufficient coverage without superfluous features
• Maintaining excellent habits and living a healthy lifestyle will help you save money on premiums over time
• Never accept the first plan you come upon. To compare costs and coverage choices, get quotations from many insurance providers
• A family floater plan might be an affordable choice if you have a family because it covers several individuals under a same policy
• If you didn’t file any claims the year before, many insurance companies may give you a No Claim Bonus on your Health Insurance renewal premiums

Conclusion

Once you understand what creates variations in your health insurance premiums, you will be better equipped to make informed decisions while choosing a plan. Keep in mind that the best health insurance plan is not about the affordability but the proper balance between cost and comprehensive coverage based on the needs of the buyer. There are so many ways to be smart about your health; one of these is to choose a health insurance plan that’s got your back—and your family’s—in case any medically unexpected situation arises.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action. Tax benefits are subject to changes in tax laws. Please contact your tax consultant for an exact calculation of your tax liabilities.| EL/BLOGS/24-25/14