Let us have a look at the 12 most important factors that affect health insurance premiums which will help you make a better decision on the type of health insurance plan to choose.

If you are given an option what would you choose between health and wealth? You will choose health. This pandemic has been an eye-opener to all that health insurance is as important as life insurance. Even young age people are prone to get medical issues. We take years to save our hard-earned money and it would take just 6 to 7 days to spend the entire savings on a hospital bill. Health insurance is a protection that is offered to you to get your expenses spent either reimbursed or get directly paid by the insurance company. Health insurance helps you to recover the expenses spent on your hospitalisation. Health insurance provides health coverage and offers tax benefits too. If you are planning to purchase health insurance you should be aware of the factors that affect health insurance premiums.

Factors that Affect Health Insurance Premiums 

Several factors that affect health insurance premiums are taken into account while calculating the health insurance premium. The most common factors are age, risk pool of your profession, past medical history, habits and lifestyle, sum insured, coverage provided, policy duration, etc.

1. Your Age Determines Health Insurance Premium:

One of the most important factors that affect health insurance premiums is age. Our elders have always reminded us to start saving when we are young. So why not start saving wealth for our health at a young age? Because that’s what the health insurance companies also expect from us. The younger you are, the lower will be your health insurance premiums. Why wait until we get medical complications and then decide on getting health insurance? In this case, we have to pay higher premiums which is a waste of money and time. Health insurance premiums for older people are higher as they are prone to get medical complications.

The minimum age entry to get health insurance is 18 years and the maximum is 65 years. Although the dependent children can get health insurance coverage from the age of 3 months to 25 years.

2. Any Pre-Existing Medical Health Conditions:

This is another important factor that affect health insurance premium. Whenever a policy is issued for health insurance the underwriter responsible for issuing your policy will check your health status by taking an FMR i.e Full Medical Report. The health insurance agent will ensure if you are healthy or not. If you have any pre-existing medical condition the health insurance company will expect you to be honest and reveal the medical conditions. If you’re healthy, then the health insurance premiums will be lower. If you are diagnosed with any pre-existing disease, then the health insurance premiums will be slightly higher. The coverage offered will be based on your health status.

If a person is diagnosed with a pre-existing medical condition, the insurance company might ask the person for a waiting period or sometimes may also reject the proposal. The process of medical check-up might seem tiring but sometimes an unknown disease may be detected at the time of FMR. This will give you an upper hand when you face any issues during the claim in future. If you unknowingly forget to reveal any medical condition and if the insurance company comes to know of your condition they will directly reject your claim. So always choose a policy that asks for a medical check-up.

3. Family Medical History is also Considered:

Few insurance companies consider this as one of the factors that affect health insurance premiums. Certain ailments are passed on to the family members through genes. This is called genetic disease. Understanding your family’s medical history will help the insurer to overlook the risk of getting them. This determines the risk of developing certain hereditary diseases like diabetes, heart problems, cancer, blood pressure and asthma. The insurance company might charge a higher health insurance premium if you are at risk. In most cases, the companies ask for family medical history to understand your overall health status.

4. Nature of Profession is Considered:

Though your profession should not affect your premium much it is also considered as one of the factors that affect health insurance premiums. A person with a less risky job will pay a lesser premium. A person who works in a risky environment such as mining, radiation exposure jobs, armed forces, fire-fighters etc might be charged a higher premium. Health insurance will not be denied based on the nature of work but it is just considered as one of the factors to determine the health insurance premium.

5. Duration of the Policy:

This is also one of the important factors that affect health insurance premiums. Each insurance company have a different premium range but in most cases, if the policy tenure is longer the health insurance premium will be less. If the policy is taken for a short duration then the premium will be higher.

6. Lifestyle Habits of the Insured:

Our lifestyle determines our health and is also one of the factors that affect health insurance premiums. If the person has a habit of excessive drinking or smoking or chewing tobacco then the person is at higher risk of getting a life-threatening disease. These individuals will be charged higher health insurance premiums.

If a person has a smoking habit the blood samples will be taken wherein the cotinine levels in the blood should be within the acceptable range. If it is higher the proposal may be rejected or the premium amount will be affected.

7. Body Mass Index or BMI of the Insured:

Body Mass Index is also considered as one of the factors that affect health insurance premiums. The Body Mass Index of a person should be within the acceptable range according to the insurance company norms. Higher BMI will lead to rejection of proposal or higher health insurance premiums. Higher BMI may lead to some serious ailments like heart disease and diabetes, so these individuals are likely to visit hospitals more often than healthy people.

8. Geographical Location of the Insured person:

Geographical location is also one of the factors that affect health insurance premiums. The rates of premium differ based on rural and urban places. Places that have basic climate issues or health issues factors are considered by certain insurance companies. Not all companies consider this factor. So go through the policy terms in detail before purchasing a health insurance policy.

9. Type of Plan the Insured Person Chooses:

A group health insurance policy and an individual policy is likely to have lower health insurance premiums. A family floater plan will have a higher premium based on the size of the family.

10. Sum Insured Amount and Add-on Covers in the Policy:

The sum insured is the maximum amount that can be claimed during a medical emergency. Getting a policy with a high sum insured will be a smart way to get insured as it gives you higher financial coverage. The health insurance premium will be higher for high sum insured but this should not stop you from getting higher benefits. The type of add on covers also increases the premium amount. That is the reason why it is considered one of the factors that affect health insurance premiums.

11. Gender of the Insured:

This might sound strange but the health insurance premiums are higher for females than males. According to years of medical research, it has been proven that women are more susceptible to chronic illness than men. According to insurance companies, the probability of women visiting the doctors are high so the premium rates are slightly high. As they are likel to use the sum insured more often gender is considered as one of the factors that affect health insurance premiums.

12. Marital Status of the Insures:

When it comes to health insurance a married couple gets higher benefits than unmarried people. The health insurance premium is lower for married couples.

To Sum Up:

We have discussed all the factors that affect health insurance premiums. So considering these factors choose your health insurance plan wisely. Health insurance should be a part of your financial planning and the reasons are;

  • Your health is the most important asset of all which has to be safeguarded and insured.
  • Just like we deal with economic inflation likewise, medical inflation should also be considered. Keep renewing the health insurance from time to time.
  • By taking health insurance you are saving your hard-earned money and time.
  • With changing lifestyle habits and unpredictable pandemics on the way ensure you are financially safe during medical emergencies.
  • Get insured at the earliest to stay secured and also for lower premium rates

Prateek Mahesh

Prateek has 17+ years of experience writing in Investment Strategy and Sales for Life Insurance. He has done MBA in Insurance and Investment.

Their aim is to educate people on various insurance topics so that they can make wise decisions.

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