6 Key factors impacting Health Insurance Premium

Health Insurance assists you by providing financial support and access to quality healthcare without you having to worry about hospital bills. Buying a Health Insurance policy for yourself and your family has become crucial to be secured against rising medical inflation and medical emergencies. The hospitalisation expenses, surgery charges, pre- and post-hospitalisation expenses, other policy benefits, etc., are covered at an affordable premium. Moreover, the premium paid towards availing Health Insurance is exempted from the income tax under section 80D of the Income Tax Act, 1961.

Health Insurance premium defines the amount paid to avail the Health Insurance coverage. We are aware of medical coverage and benefits of Health Insurance. However, people are less aware of the factors that impact the Health Insurance premium.

Here are some key factors that have an impact on Health Insurance premiums.

Family Health History

Health Insurance provides coverage against health risks, so it is crucial to disclose the policyholders’ health history, if any. The same goes for pre-existing diseases as well. Both factors have a significant impact on calculating the Health Insurance premium. To cover the pre-existing health risks of individuals, the insurer might levy a high premium. Moreover, the premium might vary based on the severity and risk of the disclosed pre-existing diseases.

Age

Age is one of the key factors in calculating the Health Insurance premium. The younger you are the lower your premium because elderly people are more vulnerable to health problems compared to younger ones. In a Family Floater Health Insurance policy, the premium will be determined by the age of the eldest member. Hence, it is wise to buy a separate Health Insurance policy for parents to keep your policy premium low.

Policy Type

Usually, the premium of Individual Health Insurance policy is lower when compared to a Family Floater Health Insurance policy. Because floater policies cover the risk of every individual insured under the policy, whereas, an Individual Health Insurance policy covers only the risk of one individual.

Sum Insured

Sum Insured is one of the key factors impacting the premium. The policy’s Sum Insured defines the maximum coverage you can claim for incurred medical expenses. The lower your Sum Insured the lesser your premium and vice versa. Minding the medical inflation and opting for a higher Sum Insured is essential because if the medical bills exceed your Sum Insured, you might end up paying out-of-pocket. Opting for a Top-up policy will solve the issue because it entitles you to avail coverage up to Rupees One crore at an affordable premium.

Add-on Covers 

Add-ons are additional coverage that come along with the opted Health Insurance policy. Add-on defines the additional benefits that do not fall in the policy’s inclusion by default such as personal accident cover, critical illness cover, hospital cash, etc. The insured can avail themselves of the add-ons by paying an additional premium. This applies for the riders as well. If you personalise your Health Insurance policy with all the required add-ons, it will impact the premium and results in a higher premium. However, the premium paid for add-on cover can be exempted from the income tax.

Also, be mindful that the overall sum of the premium for the purchased add-on should not exceed 30% of the standard Health Insurance policy’s premium.

Occupation

The nature of the job can also have a impact on the premium. Individuals who work in factories and construction sites are subjected to pay a higher premium compared to office workers to cover the risk of the individual due to their nature of work.

Besides the above-mentioned factors, co-payment, deductibles, BMI and lifestyle can also affect the Health Insurance premium. Have you ever wondered why your Health Insurance premium is getting increased at the time of renewal? Usually, across the industry, the insurer revises the premium every year minding the medical inflation rate, the insured’s health risk, etc. You can get your premium calculated online by filling in the required details. Compare and pick the best Health Insurance plan that suits all your needs.