Health insurance in today’s day and age has become a necessity than a luxury. With soaring costs of medical treatment, health insurance plans help provide a financial cushion that can help you mitigate these expensive treatment costs without taking a dent in your savings.
Selecting a health insurance policy from diverse alternatives can often be confusing. This is primarily due to the different price points at which these policies are available. But the premiums for these plans are based on not just one single factor but a combination of many. If you are confused about which factors impact the tip of your health insurance plan, this article will help you learn more about it. Continue reading to know more.
Insurance companies have pre-defined parameters based on which they charge premiums. While most insurers have their parameters, the insurer keeps a few common considerations in mind.
1. Type of insurance plan
The premiums of your policy are greatly influenced by the type of policy you purchase. There is no one size fits all approach when buying a health insurance policy, so there are various alternatives to choose from. For instance, an individual policy is good for one beneficiary, whereas a health insurance plans for a family cover all members at once. Since the coverage offered in these policies differs significantly, the premium charged for it also varies. Also, various plans are available like senior citizen cover specifically designed for elderly insurance buyers, critical illness plans that cover fatal ailments like cancers, and many more. * Standard T&C Apply
One critical factor based on which the premium is levied your age. As your age increases, diseases are more likely to be gripping you, thereby requiring medical coverage. Thus, the earlier you buy, the lower is the premium. For individual policies, the age of the sole beneficiary is considered, whereas, for family health covers, the age of the eldest member is considered for determining compensation.
3. Pre-existing ailments
Another factor that impacts the premium is the existing ailments. The diseases already existing at the time of purchase of your policy are termed pre-existing diseases. They increase the risk for the insurance company as you are more likely to seek treatment for such ailment and increase the premium cost. When you buy a policy, make sure not to conceal any such illness. If discovered at the time of claim, such ailments may result in the rejection of your application in its entirety. Some insurers levy a waiting period along with increased premiums for pre-existing ailments. * Standard T&C Apply
4. Medical history and Lifestyle
Your family medical history plays a crucial role in determining the possible health risks. Insurance companies require applicants to undergo health check-ups above a certain age to know of the various health risks. In addition to that, a declaration by you, the applicant, is also necessary in this regard. Further, your Lifestyle also determines the premium. For instance, smokers are charged a higher premium to compensate for the increased health risk compared to non-smokers.
5. Policy tenure
The policy tenure also has an impact on the premium. Since more extended the coverage offered by the insurer, the higher the premium charged for it compared to an annual insurance cover. In addition to that, buying a multi-year policy helps to avail concession on premium compared to single-year policies. *All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply
These are some factors that determine the premium of your policy. A health insurance premium calculator is a nifty tool that can assess the impact of such factors at the time of policy purchase. Lastly, remember insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.