6 Factors that Affect your Health Insurance Premium

 

The two main features that determine the efficiency of a health insurance plan are the premium and the coverage. The premium, especially, helps potential policyholders decide whether a plan is ultimately affordable for them or not. Health insurance companies consider several factors when deciding on the premium for any of their policies. Most of these factors are based on the risks they pose to an individual’s health. Some of them are indeed in your control and can be worked upon to get a better deal on the premium. If you are curious about these factors, then read on. 

 

1. Age of the policyholder 

 

The age of the policyholder has the biggest influence on the health insurance premium. Individuals tend to get more vulnerable to illnesses and sickness as they age. This increasing vulnerability means there will be more claims on the health insurance plan. Thus, as the risk increases, so does the premium.

 2. Location of the policyholder

 

The location factors during a health insurance plan because the environment one lives in affects one’s health tremendously. Individuals who live in polluted areas or areas where there is a lack of medical facilities may incur a high premium as these things would affect their health negatively. 

 

3. Lifestyle of the policyholder

 

The premium of health insurance plan is also affected by the policyholder’s diet and exercise, smoking habits, job, occupational hazards, and so on. Smoking habits especially can lead to high premiums as it leads to early symptoms of many serious illnesses and weakens several physiological systems. If you are engaged in an occupation that involves dangers and puts your health at risk, that too might affect the premium of your health insurance plan to a certain extent. 

 

4. Pre-existing illnesses 

 

If you have any illnesses from before the purchase of the policy, you will have higher premiums. This is because the presence of these illnesses would mean that there may be more claims on the health insurance plan.  If you have no pre-existing diseases, the premium could be lower. 

 

5. Deductibles and co-pay 

 

In most general insurance policies, there is a feature of co-pay or deductible. These are out-of-pocket expenses that the policyholder has to pay themselves. If these expenses are higher, then the policyholder will incur lower premiums and vice versa. This is because a higher co-pay or deductible means more sum insured is retained. 

 6. Coverage

 

Your health insurance premium will be affected largely by the coverage you have opted for. If you have chosen any add-ons such as critical illness benefit policy, you will have to pay higher premiums for the additional coverage. A Mediclaim policy will incur lower premiums while providing basic coverage for a variety of diseases. Overall, ensure that the premiums you are paying are equal to the coverage you are receiving. 

 

We hope this article has helped you understand the factors behind the premium of your health insurance plan. Different insurers have different parameters on which they calculate the premium amount. Have a talk with your insurance provider about the things they consider when assessing your premium. If you feel that the premium is too high, you can work on some of those factors and reduce the overall amount. All the best.

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